Less Focus on the Dollar, More Focus on the Ruble: Currency Management Strategy in Kazakhstan, Post Devaluation

摘要

Business entities operating in Kazakhstan, as in other countries, place temporarily idle funds in interest bearing accounts. Local banks provide the option of accounts denominated in the local currency, Kazakhstani Tenge (KZT) or a foreign currency, principally Dollars, Euros or Rubles. However banks offer a higher rate on the KZT account so, for local enterprises, shifts between local currency and foreign currency accounts only occur if there are signals in the global interbank trading rates that indicate a depreciation due to a change in the level of intervention on the part of the country’s central bank, the National Bank of Kazakhstan (NBK). More importantly, signals of a pending devaluation are key to shifting funds to foreign currency accounts, to protect the loss of foreign exchange values of their reserve funds.