US Congress votes to make Magnitsky Act applicable to other statesWorld December 09, 8:18
Analysts assume Trump poised to improve ties with RussiaWorld December 09, 8:12
UN envoy on Syria suggests resumption of intra-Syrian talksWorld December 09, 6:42
US Senate prohibits defense cooperation with RussiaMilitary & Defense December 09, 4:55
Russia, Cuba sign defense cooperation program until 2020Military & Defense December 09, 3:26
Putin jokingly suggests Russia should develop teleportationScience & Space December 09, 2:07
Russian investigators conduct searches across Russia over doping casesSport December 09, 1:52
Source: Postponing OPEC, non-OPEC meeting still option for RussiaBusiness & Economy December 09, 0:35
Sports arbitration court strips Russian boxer of 2016 Olympic silverSport December 08, 22:48
This content is available for viewing on PCs and tabletsGo to main page
MOSCOW, August 21. /TASS/. Kazakhstan’s tenge has plunged by 35.5% against the US dollar overnight. "This is Kazakhstan’s reaction to the ruble and yuan devaluation," Chairman of the VTB Bank Supervisory Board and ex-chief of the Russian Central Bank Sergei Dubinin told TASS on Friday.
"Kazakhstan’s economy is focused on raw material exports and the fall in world oil prices has predetermined the tenge devaluation," Dubinin said.
"Therefore, Kazakhstan has found itself among other oil-extracting countries, from Venezuela to Russia, whose national currencies have suffered from the developments on the markets of hydrocarbons and other raw materials."
"Domestic demand and the purchasing power of the population and enterprises have been observed to decline both in Kazakhstan and Russia. That is why, the tenge devaluation has become an inevitable process. It will cause inflation growth and a decline in household incomes but is expected to revitalize the economy," Dubinin said.
Short-term fluctuations of the ruble are possible due to the tenge devaluation. Also, this will affect some Russian industries, the ex-central banker said.
"At some moment, Russian goods became more competitive than local output in trade within the Eurasian Economic Union and Kazakhstan was imposing restrictions on the import of goods from Russia. Astana’s counter-measures may reduce the sales of the Russian auto industry and machine-building because it will be more advantageous for Kazakhstan to buy Chinese analogs," Dubinin said.
"The tenge devaluation will not cause any disastrous consequences or extremely changing trends for the Russian market, all the more so as the data of Russia’s State Statistics Service (Rosstat) show that slightly less than 3% of Russia’s exports went to Kazakhstan in the first half of the year," Dubinin said.
Dubinin’s view is shared by Deutsche Bank Chief Economist for Russia Yaroslav Lisovolik.
"I don’t think that the tenge devaluation will have a considerable effect on Russia. The Russian ruble has already reacted to the fall in world oil prices and is hardly likely to move downward due to the tenge’s plunge. The price of an oil barrel remains a key factor for the ruble," Lisovolik told TASS.
"But an inflationary spiral caused by the devaluation of national currencies is a negative factor for the world economy, which leads to lower demand, slower trade and weaker economic growth," the expert said.
"Structural transformations are needed in oil-producing countries to avoid the negative influence of currency wars on the world and national economies: these countries need to coordinate their monetary relations in their mutual interests," Lisovolik said.
TASS may not share the opinions of its contributors