Kazakhstan: Tenge May Tumble Despite China's $10-Billion Aid Package

A further devaluation of Kazakhstan's national currency appears imminent, some analysts are saying.

Dmitry Pushkarev, chief of financial and economic analysis at 2Trade.ru, told the Nezavisimaya Gazeta daily on April 20 that the tenge's value may tumble an additional 15 percent in the coming six months, as the Kazahstani government struggles to stabilize its economy.

Although Kazakhstan just received a $10-billion assistance package from China, much of the aid money comes with strings attached. "The Chinese are pursuing their own interests by stimulating their exports to Kazakhstan, and the fact that half the credit comes from the Export-Import [Exim] Bank of China, says a lot," Pushkarev said. "The [Chinese] money [also] does not cover consumers' credit debt to the banking sector."

Denis Popov, a senior analyst with NetTrader, said it was not in China's interests to see the tenge tumble, but warned forces beyond either Beijing or Astana's control could yet scupper the Kazakhstani currency. "If the price of oil continues to stay above the $50 per barrel mark, then this $5 billion [in Chinese aid] may be enough until the end of the year. If the price drops below $40, then these funds may not be sufficient to maintain the course of the tenge for a month," he warned.