Kazakhstan: Tenge recovers lost ground in May
Kazakhstan’s tenge (KZT) strengthened notably against the U.S. dollar in May and at the start of June, after having sunk to a record low in March. The currency ended 5 June at KZT 400 per USD, marking a 6.1% appreciation over the same day in May. That said, the currency was still down 4.2% on a year-to-date basis and 3.8% year-on-year after March’s sharp fall amid plunging oil prices and downbeat investor sentiment.
The strengthening largely reflects recent reserves selloffs by the central bank and state-owned entities to transfer money to the government, which puts upward pressure on the currency. The central bank sold over USD 1.0 billion from the rainy-day National Fund in May. In addition, a recent rise in oil prices has also relieved some downward pressure on the currency.