TENGE TURMOIL - FROM BAD TO WORSEEarly November: A Rocky StartNovember began with an unpleasant surprise. The tenge, as if breaking loose, started to plummet rapidly. On global markets, the U.S. dollar gained strength due to the Federal Reserve’s tight monetary policy, and Kazakhstan felt the impact particularly hard. Capital outflows surged, leaving the domestic currency market in shock. By November 10, the exchange rate had surpassed the 510 tenge per dollar mark.The National Bank, like a firefighting crew, rushed to contain the blaze with interventions. It spent $300 million trying to curb the rising exchange rate, but the effect was short-lived. The decline persisted, triggering the first signs of panic among businesses and citizens.Mid-November: Rising PanicBy mid-month, the situation had reached a boiling point. Oil prices—Kazakhstan’s economic backbone—plunged to $71 per barrel. This blow to the economy sent the tenge into another downward spiral. The National Bank responded with another round of interventions, pushing total spending to a record $1 billion in just two weeks. Yet stabilizing the market became increasingly difficult as the exchange rate hit 518 tenge per dollar.Meanwhile, the public rushed to banks to buy up foreign currency. Prices for imported goods, including electronics and food, began to soar. Companies, especially those reliant on imports, froze projects, revised plans, and faced skyrocketing procurement costs.Late November: On EdgeBy November 25, the tenge plummeted to a critical low of 522 per dollar, setting off alarm bells—something had to be done. In response, the National Bank, like a captain steering a sinking ship, took drastic action, raising the base interest rate to 15.25%. Though the move shocked many, it was an inevitable step. Inflation had surged to 8.5%, making market stabilization increasingly difficult.As the month drew to a close, the government announced plans to enhance coordination between the National Bank and major companies to boost foreign currency inflows. However, these measures were viewed as temporary fixes. Without deeper structural reforms and a clear long-term strategy, it was evident that the tenge would remain vulnerable.PAYING THE PRICEThe closing months of 2024 brought a harsh reality check for Kazakhstan’s economy, once again highlighting its vulnerability to external shocks. The rapid decline of the tenge sent prices soaring, forcing businesses to scramble and ordinary citizens to tighten their belts. For small and medium-sized enterprises, this sudden devaluation translated into higher costs for imports and raw materials. Meanwhile, households struggled with rising prices on everyday essentials, intensifying anxieties across the nation.The big question now is: what’s next? While the government and the National Bank have pledged to defend the currency market, analysts remain skeptical that the storm has passed. With 2025 on the horizon, many foresee more turbulence ahead. Experts contend that patchwork fixes won’t be enough this time. What Kazakhstan needs is a bold, long-term strategy—one that not only strengthens ties with global markets but also boosts domestic production to reduce reliance on imports.Will policymakers rise to the challenge and implement meaningful reforms? Or will they default to empty promises and endless debates? Only time will tell. (ICE ALMATY)

Fonte notizia: INTERFAX