The National Bank of Kazakhstan is satisfied with the rate of tenge towards US dollar

/Almaty office of REUTERS, 10.08.99/ - The National Bank of Kazakhstan is satisfied with the situation on the foreign exchange market of the country, and there are no prerequisites for either devaluing the national currency or revaluing it, said the vice-chairman of the National Bank Iskander Beisembetov to Reuters. "The National Bank is not interested in very strong tenge. At the same time the National Bank does not want tenge devaluation to continue as it did in the first half of the year",- he said - "and the National Bank is completely satisfied with the current situation on the market". Export increase, after a sharp tenge devaluation in April of this year when Kazakhstan introduced a floating exchange rate, intensified the influx of foreign exchange earnings and as a result tenge began to strengthen gradually from the beginning of summer. An official exchange rate established by the National Bank varies between 130-132 tenge per dollar during the last two months. Today at KASE tenge exchange rate slightly went down to 131.51 from 131.57 of Monday trades. The National Bank is the main buyer of US dollars at the stock exchange. Its gold and foreign exchange reserves increased by $43 mln. in July and by $25.9 mln. during the first week of August mainly due to foreign currency purchases at the stock exchange. According to Beisembetov, if the National Bank did not buy foreign currency in the domestic market, thus increasing the monetary mass, tenge could increase up to 125 for dollar which is bad for the exporters. On the other hand, fast devaluation of tenge would intensify the inflation and restrict import of technical equipment, new technologies for the exporters which would slow down the reforms in the real sector, believes the National Bank. "It is also a burden on banking sector, which gives credits in tenge and on social sphere. Therefore, the National Bank would like to maintain the current exchange rate", said Beisembetov. The National Bank believes that the current real exchange rate of tenge makes goods manufactured in Kazakhstan competitive in the world market. Improved payments balance testifies it. The National Bank did not provide with the data on payments balance. "On the one hand, the National Bank replenishes its gold and foreign exchange reserves, on the other hand, helps exporter to work efficiently, and the third, increases the monetary mass in the economy by buying foreign currency and releasing tenge into the market. It helps the government to fulfill the budget", said the National Bank representative. He added that the National Bank would pursue the floating exchange rate policy in year 2000. "The National Bank does not plan any foreign currency interventions, although it would do so to smooth out short term unbalances between demand and supply, to replenish its gold and foreign exchange reserves and to protect tenge from massive speculations", said Beisembetov.