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Tenge Fever: Kazakhs Anxious Despite Slight Rebound In National Currency

  • Farangis Najibullah

The tenge lost more than one-quarter of its value against the dollar on August 20.

The tenge lost more than one-quarter of its value against the dollar on August 20.

A slight rebound by Kazakhstan's national currency, the tenge, one day after a sudden exchange-rate crisis might hearten officials, but it's unclear whether it will ease the anxiety of ordinary Kazakhs as price hikes spread across the country.

The tenge lost more than one-quarter of its value against the dollar on August 20, when officials announced the "forced measure" of relinquishing their currency-band exchange-rate system in favor of a free-floating exchange rate.

The tenge's official rate recovered slightly by late trading on August 21, rising from 255 to the dollar to 238 to the dollar, local media reported.

"I'm just returning from a furniture shop," an Almaty resident who did not wish to give her name told RFE/RL's Kazakh Service. "A sofa I had earmarked was 140,000 tenges yesterday. It costs 180,000 tenges today."

She added that food prices at her local shop were also "slightly higher this morning."

Many of her compatriots took to social media to express their anger.

"It's another experiment on people," commented Almaty resident Yevgeny Gerasimov.

"We were told that the exchange rate of 182-188 tenges per dollar would be kept until the end of the year.... You shouldn't listen to anyone, and moreover don't trust anyone," wrote Mashalia Ahmed, a Facebook user from the capital, Astana.

"What will happen next? Will the tenge plunge further to 300-350 against the dollar? What we are supposed to do -- live with it?" asked Astana resident Said Syzdykova.

Kazakhstan, the second-largest post-Soviet oil producer after Russia and a significant exporter of metals, has seen exports drop 40 percent this year due to low global oil and commodities prices. Drops in the values of some of its major trading partners' currencies, notably Russia and China, are also part of the problem.

Another Kazakh, Gulzhan Kospan, added on Facebook: "What has been going on in Russia is happening now in our country, nearly 300 tenges against the dollar, it's mayhem. We don't produce anything...our economy is dire, unemployment is widespread, the wages and jobs are being cut, and foreign debt is going up...No one cares about ordinary people."

Kospan isn't the only one accusing the authorities of "not caring" about ordinary people.

"The authorities only rob the people; they don't do anything useful and only complicate everyone's lives -- who needs this?" wrote a Facebook user from Almaty, Akgul Teklif.

"We are let down again and it's becoming a norm. The government is against the people," tweeted "Ernur":

It's not just Kazakhs watching the tenge crisis closely, though. The Russian economic woes have sent shockwaves into neighboring countries, with the Belarusian ruble and the Georgian lari the most obvious currencies to suffer.

"Russia is drowning and taking down its all satellite countries with it. This is a sharp difference between European Union and the [Eurasian] Customs Union," Hlotau Konstantin, a Facebook user from Minsk, Belarus, commented on Russian media coverage of the tenge devaluation.

And others have expressed skepticism of the benefits of Russian-led economic groupings, as well.

"Who else wants to join the Customs Union? There are enormous prospects," quipped Sergei Musiets from Borispol, Ukraine.

The Kazakh National Bank devalued the tenge by 19 percent in February 2014 in an effort to ward off the kind of pressures that prompted this week's abandonment of a fixed currency rate.

One official who follows industry in eastern Kazakhstan closely noted that the latest decrease in the tenge's value could have a favorable impact on many Kazakh businesses by making their goods cheaper against the foreign-made competition.

"I've met with many business leaders who have been asking, 'When will the tenge devaluation happen?' because it enables them to be competitive in the market," said Nurlan Musin, who heads the Department of Entrepreneurship and Industrial-Innovative Development in the East Kazakhstan Province.

Musin was also quoted by local media on August 21 as saying food prices would not rise in the aftermath of the tenge devaluation.

He said the regional government had set up a special body to monitor the prices of 33 food and household products, including bread, meat, cooking oil, and dairy products.

Musin even went so far as to say the current crisis would have no negative impact on ordinary people's lives, a view that appears to be at odds with that of many of his countrymen.

With reporting by RFE/RL's Kazakh Service
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