Why does the tenge fall while oil prices are good?
The high correlation between the tenge and the ruble, caused by the mirror image of the economies based on energy prices, has shown for the first time the causes ramification of this phenomenon. Thus, even though oil prices are now on high, another reason for the high correlation between the tenge's exchange rate and the ruble, is the trade partnership between Russia and Kazakhstan, which is growing every year.
Proof of this is an increase in turnover for the past year by 26% compared with the previous year. Russia is also the leader among countries with a supplier of imported products, increasing by 19.1% compared to the previous year. Strengthening trade dependence between the two countries on the face and it naturally affects the strengthening of the correlation between the tenge exchange rate and the ruble and increases between the currency sensitivity.
The foreign exchange market of Russia showed a negative dynamics of the national currency, taking the support level of the rate of 57.14 from March 25, 2018 for the pair USD / RUB, which coincided with the presidential election. April 08, 2018 the rate stopped at 62.14 and today is in the corridor touching the levels of 63.54 for the pair USD / RUB.
At the same time Kazakh tenge showed identical dynamics from the level of 320 KZT / USD, coming to the border of 350 KZT / USD for today.
The dynamics of the tenge and the ruble are very similar as we see for many reasons, but the delta that makes the courses unique, depends on many internal economic factors of countries, such as budget policy, economic development, market penetration and much more.
The forecast for the KZT / USD pair remains negative until the end of August 2018. Wavy movement is aimed at overcoming the border of 350 KZT / USD. Until the end of 2018, the expectation to pass the 365 KZT / USD mark remains unchanged under the current market conditions.
Eldiyar Muratov for FORBES