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TENGE WILL CONTINUE WEAKENING AS TURBULENCE IN GLOBAL MARKETS PERSISTS - BTA SECURITIES

Almaty. August 8. Interfax-Kazakhstan - Kazakhstan's national currency - the tenge - will continue falling against the U.S. dollar this year, believe analysts of BTA Securities.

"The Kazakhstani tenge as well as the Russian ruble will continue to weaken against the U.S. dollar amid the remaining turbulence in the global markets and the anticipated slump in oil prices. The yearly average exchange rate of USD/KZT will be higher than the 2011 peaks and will likely rise above the 150 mark," the company said in its Investment Strategy for the second half of 2012.

The current exchange rate is 150.14 tenge /$1. In 2011 the yearly average exchange rate was 146.7 tenge /$1. Last year the tenge fell by 0.6% to trade at 148.4 tenge /$1 at the end of the year. During 2011 the tenge exchange rate against the dollar floated within the 145.45-147.99 range.

According to BTA Securities, the tenge exchange rate is stable and no major devaluation should be expected.

"Fundamental factors suggest that even if tenge does not strengthen, it is unlikely to significantly fall. The economic growth rates will remain high. The inflation will be near the lower limit of the National Bank's target band. The current account and trade balance will remain positive. The financial situation will remain favorable. The budget deficit will be below 3%. The country's real budget (state budget including the National Fund) will be running at a surplus," the Investment Strategy noted.

Among the factors that may prevent the tenge from strengthening the BTA Securities analysts have named a possible fall in oil prices, intervention of the National Bank to support the competitiveness of domestic exports, a possible collapse of the markets leading to a surge in the demand for the dollar as a safe haven currency and the anticipated weakening of the Russian ruble.

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