Kazakhstan's central bank raised its key interest rate from 12 percent to 16 percent on October 2 as it continues to try to bolster its oil-dependent currency, the tenge.
The National Bank of Kazakhstan said in a statement that its decision was based on “the economic data and prospects for growth,” and that the goal is “to keep inflation in the medium-term target range of 6 to 8 percent.”
Kazakhstan’s government has spent over $1 billion to stem volatility since its currency corridor was abandoned in response to declining global oil prices.
Since the adoption of a free floating market rate in August, the value of the tenge has swung between 208 and 300 tenge to the dollar.
As a result, an increasing number of businesses and individuals have been using U.S. dollar for transactions.
In June, the central bank’s official exchange rate corridor ranged from 170 to 188 tenge per dollar.
In mid-July, that corridor of fluctuations was expanded from 170 to 198 tenge per dollar.