Comment by Darkhan Lukpanov: Why tenge is not strengthening against ruble or shall we buy?

friday 2017-02-24 15:41

One could see an interesting picture at the Kazakhstan Stock Exchange recently: tenge is strengthening against dollar practically each day, while ruble is not.

Thus, by the results of the day session of February 22, the weighted average US dollar rate with T + 0 settlements in tenge (USDKZT_TOD) was 313.45 tenge against $ 1 with the trading volume of $ 218.5 million. On the same day, the weighted average Russian ruble rate with T + 0 settlements in tenge (RUBKZT_TOD) amounted to KZT5,4600 per ruble with the volume of trade reaching 10 million rubles.

To recap, the USD exchange rate at KASE started to refresh the annual lows in January and was constantly losing its positions.
From early winter the American currency devalued 9% against tenge, from KZT 341 to KZT 314, while we did not see any significant strengthening of tenge against ruble.

Darkhan Lukpanov, Tsesna Capital analyst explains variable behavior of the national currency against ruble and dollar by close resemblance of the Russian and Kazakhstan economies, with currency exchange rates varying under same external factors. Hence, their pretty similar dynamics.

- it should be borne in mind, however, that the correlation between currencies is not always stationary, even when it comes to the currencies of highly integrated economies. For example, in December last year ruble strengthened against the dollar much faster than the tenge. That was explained by the relatively greater accessibility of the Russian capital market for foreign investors, who were attracted by interest rates in Russia, the benefits of the so-called carry trade, "he said..


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