What Supports the Tenge: Exchange Rate Dynamics in January 2025
Kazakhstan’s national currency strengthened by 1.33% due to internal and external factors
January 2025 saw a slight strengthening of the tenge, with the exchange rate rising from 525.11 to 518.14 tenge per US dollar, a gain of 1.33%. As of February 5, the official exchange rate stands at 520.27 tenge per dollar.
Experts highlight key internal and external factors that contributed to the national currency’s growth.
Internal Factors Supporting the Tenge
The conversion of transfers from the National Fund played a significant role in stabilizing the exchange rate. January traditionally sees a decline in business activity, which reduces demand for foreign currency. As a result, the supply of foreign currency on the market exceeds demand, helping to support the tenge.
Tighter currency regulation also contributed to strengthening the tenge. Restrictions on foreign currency transactions have reduced speculative dollar purchases, while most currency operations are now concentrated in foreign trade and business investments.
However, strict currency control carries risks. Experts warn that artificial intervention in exchange rate formation creates long-term imbalances. If economic conditions deteriorate or regulatory oversight weakens, sharp exchange rate fluctuations could occur.
External Factors Affecting the Tenge
The strengthening of the Russian ruble had a positive impact. In January, the ruble gained 13%, falling below 100 rubles per dollar. This was driven by a seasonal decline in import demand in Russia and sanctions against Gazprombank, which limited capital outflows.
U.S. dollar fluctuations also played a role. The Dollar Index (DXY) fell by 0.12% to 108.4. Donald Trump’s statement about the need to lower interest rates created uncertainty among investors. In response, the Federal Reserve kept its key rate at 4.25–4.50%, awaiting new data on inflation.
Another supportive factor for the tenge was rising export prices. Kazakhstan’s export price index increased by 0.4%. In January, oil prices exceeded $80 per barrel but later fell to $75 after Trump suggested imposing a 25% tariff on oil imports from Mexico and Canada, which could reduce demand.
Tenge’s Outlook
Global commodity markets remain highly volatile, which could impact the tenge going forward. If China implements economic stimulus measures, demand for industrial metals, including copper, may rise, boosting Kazakhstan’s export revenue.
The tenge may face increased volatility in February, but a strong ruble and potential oil price growth could continue to support Kazakhstan’s currency.
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