Kazakhstan ready to float its currency
Uncertainty and opportunity as Kazakhstan prepares currency float
Kazakhstan is about to take another step on the path to becoming a recognized mainstream economy by removing restrictions on its currency, the tenge. The country plans to make the tenge fully convertible in January.
“On January 1 the free flow of capital will be allowed, another step towards the tenge becoming fully convertible later,” says Arken Arystanov, chairman of the Regional Financial Centre of Almaty. The RFCA believes that the tenge’s float will assist corporates particularly, with oil companies expected to open accounts abroad to decrease onshore risks. Changes will also mean that the special licensing requirements needed to trade tenge will be removed, which is said to be attracting considerable interest among international banks. Goldman Sachs is among those believed to be looking at the opportunities that trading the currency presents. January’s changes in licensing mean it will only have to register before it starts.
But, despite the looming free float, there is uncertainty about how currency trading will develop in Kazakhstan. “Though the tenge officially becomes convertible in January, no one really knows the effects it will have. We have seen drafts but there are still questions that need answering,” says Slava Alexanian, treasurer for Citigroup in Almaty, Kazakhstan.