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Kazakhstan president asks national exporters for currency

August 20, 2015, 17:03 UTC+3 ASTANA

Kazakhstan is shifting to a new economic policy, which implies free floating national currency defined by market demand

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Kazakhstan's President Nursultan Nazarbayev

Kazakhstan's President Nursultan Nazarbayev

© Yekaterina Shtukina/TASS

ASTANA, August 20 /TASS/. Kazakhstan's President Nursultan Nazarbayev has urged national exporters to provide the republic with currency earnings.

"I am urging all our exporters to provide the country with currency earnings. All this will certainly lie on the government. All currency earnings should be sold inside the country if possible. I am asking the government to coordinate this work," Nazarbayev said at a meeting with the Kazakhstani business community on Thursday.

The president also urged the government to give up the policy of supporting all enterprises. "Millions of farmers go bankrupt in the United States. In this county, bankruptcy turns into bureaucratic foot-dragging while enterprises stand at a standstill. The government should give up its policy of indiscriminate support of all enterprises," Nazarbayev told the businessmen.

He explained that the state should support only competitive and profit-making companies.

The president ordered the National Bank to introduce a mechanism of compensation of individual’s fixed deposits. "This measure will help supporting 1.7 million people and 86% of all the depositors. We cannot allow the social feeling to deteriorate and should prevent a decline in people’s living standards," the Kazakhstani leader said.

He added that the current financial crisis was worse than the previous financial turmoil.

"When the financial crisis that started at US banks hit the financial system, we faced a crisis from which we had emerged with minor losses," the Kazakhstani president said. "But the present-day realities are different. They cover everything, including the finances and industry, and who knows what is in store for us. No expert can really say that," Nazarbayev said.

He also warned the forthcoming years could be hard and promised to punish all saboteurs who would like to use the current hardships to destabilize the situation in Kazakhstan.

"The law enforcers have received an instruction to stop any provocative actions," Nazarbayev stressed.

"They have only themselves to blame. We are doing it conscientiously for the well-being of our citizens and the country’s prosperity," the Kazakhstani president concluded.

Kazakhstan shifting to new economic policy

Kazakhstan is shifting to a new economic policy, which implies free floating national currency defined by market demand, Prime Minister Karim Masimov said on Thursday.

"Starting from August 20 of the current year, a decision has been made to begin implementing a new economic policy based on inflation targeting, and cancel exchange rate corridor. The tenge’s exchange rate will now depend on the global economic environment," PM said. "The new economic policy amid fundamental negative changes in the global economy requires a new monetary policy to provide a balance between economic growth and stability of prices," he added.

The dollar surged by 29.2% in Kazakhstan on Thursday to 255.8 tenge versus 197.9 tenge the bay before.

The free floating national currency increases the potential of Kazakh enterprises on the market of the Eurasian Economic Union (EAEU), Minister of National Economy Erbolat Dossayev told TASS on Thursday.

"For Kazakhstan’s economy, for Kazakh producers of goods and services the shift to a new exchange rate policy opens up markets. I can say that Russia and China are the main markets where we may be competitive today," the Minister said. "We have the same economic structure as the Russian Federation, both countries are now oriented toward export when the bulk of revenues depend on export of commodities," he said, adding that integration into global economy brings both pluses and minuses to the country, and the key task for the EAEU member-states is "accelerated diversification of economy."

The government of Kazakhstan plans to introduce a number of tax breaks for oil and gas producers in the nearest months. "In September, a decision will be taken on pegging export tariff duty to oil price, and the Government will stop directive regulation," Masimov said.

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