ALMATY, Feb. 4 (The Conway Bulletin) – Demand for Russian roubles has soared in Kazakhstan over the past couple of months.
Exchange bureaus’ data showed that the demand for the Russian currency increased steadily in November and skyrocketed in December despite the rouble losing value against the Kazakh tenge.
No official reason has been given for the rise in rouble demand but there are several plausible reasons.
A Bulletin correspondent in Almaty said many Kazakhs see the ailing rouble as a cheap currency for cross-border shopping.
Of course, Kazakhs may also be speculating that the rouble is valued too cheaply at the moment and that it will rise in value. This is almost certainly true of its value against the Kazakh tenge.
Eldar Madumarov, an economics professor at KIMEP, a business management school in Almaty, said that people were taking advantage of the cheap rouble.
“Russian goods have become very attractive for Kazakhstani residents, many of which have to convert their Kazakh tenge to purchase durable goods,” he said. “This generates additional demand for Russian roubles.”
The Kazakh Central Bank has vowed to avoid another devaluation of the tenge — it cut the value of its currency by 20% last year — but the market, and most people on the streets think that another sudden devaluation is inevitable.
Last month a high-profile Kazakh businessman urged the government not to devalue the tenge. Pressure is building on the Central Bank to intervene, though. Foreign currency analysts have also written memos suggesting that a tenge devaluation is just around the corner.
The economies of Central Asia have been hit hard by the fall in oil prices and Russia’s economic turmoil. Most have allowed their currencies to fall in value.
This story was first published in issue 217 of The Conway Bulletin, a weekly newspaper covering Central Asia and the South Caucasus. For more information on how to subscribe, click here