Confidence in Kazakhstan’s Central Bank slips

>>The devaluation of the tenge throws up questions for the Kazakh Central Bank

ALMATY, Feb. 26 (The Conway Bulletin) – If the Kazakh Central Bank’s decision to devalue the Kazakh tenge by 20% on Feb. 11 came as a nasty surprise, the admission by Kairat Kelimbetov, the Bank’s chief, that he had only learned of the policy shift the night before came as a frightening shock.

Readers left floods of angry comments on news websites on the apparent ineptitude of Mr Kelimbetov.

“If he didn’t know, it means he doesn’t work at all! What an irresponsible (man),” wrote one user.

The Kazakh Central Bank is supposedly in charge of the country’s monetary policy and the constitution enshrines its independence.

And yet here was the Mr Kelimbetov saying that he’d only been informed about a policy change at the last moment. Many suspect that Kazakh President Nursultan Nazarbayev, in power since 1991, influences monetary policy.

Even so, it was a PR disaster for Mr Kelimbetov, said Eldar Madumarov, an economics professor in Almaty.

“It used to be regarded as the most independent and reliable Central Bank among all post-Soviet countries, including Russia,” he said. “All he’s been saying undermines his credibility.”

The Kazakh President, with approval from the Senate, appoints the Central Bank chief. Mr Kelimbetov took over as head of the Kazakh Central Bank in October last year from Grigory Marchenko, who was considered a steady hand.

Mr Kelimbetov’s reputation appears to be in tatters as Svetlana Dzhalmagambetova, a senator, voiced when she faced him at a Senate hearing on the devaluation (Feb. 20).

“We need to know if you lack professionalism or ethics, it’s one of the two,” she said according to reports. “You misled not only the people of Kazakhstan, but also their representatives here in the Parliament.”


>>This story was first published in issue 173 of the weekly Conway Bulletin newssheet. For subscription information on the Conway Bulletin, please click here

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