It is necessary to stop currency speculation in Kazakhstan – Tokayev

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The Head of State, Kassym-Jomart Tokayev, instructed to take measures to stop currency speculation in Kazakhstan. The President said this, speaking with a message to the people at a joint meeting of the Houses of Parliament, reports.

"We are faced with a crisis of confidence in the tenge on the part of national and international investors. The low level of economic diversification and high volatility of the exchange rate restrain the inflow of foreign investment, especially in non-resource sectors. The problems of regulating the foreign exchange market and capital movement also play a negative role," Tokayev said.

According to the President, a significant part of export earnings does not even go to the domestic foreign exchange market, remaining abroad.

"The Government and the National Bank should motivate exporters to sell foreign exchange earnings. The stimulating role of monetary policy needs to be strengthened. Today, it is largely constrained by fears of an overflow of funds to the foreign exchange market. Banks are in no hurry to lend to the real economy, since they have a good opportunity to earn money in the foreign exchange market and instruments of the National Bank," the Head of State added.

The President of the Republic of Kazakhstan instructed to take measures to reorient this liquidity to lending to businesses and to stop currency speculations.

"The powers and functionality of the Agency for regulation of financial markets and the National Bank are quite enough to solve this problem. I expect a significant improvement in the situation by the end of the year," Kassym-Jomart Tokayev concluded.
Ekaterina Eliseyeva
13:22, 1 September 2020