Kazakhstan Devalues Currency To Weakest On Record

Flashback:

Here is what protects you perfectly from any currency devaluation:

Belarus Devalues Its Currency By 56% Overnight, Against Every Currency Out There:

Luckily for those who held their “money” in the form of gold and silver, they just got an instantaneous 56% value preservation and a relative boost in their purchasing power with just one central bank announcement.


Another Fed “Taper” Casualty: Kazakhstan Devalues Currency To Weakest On Record (ZeroHedge, Feb 11, 2014):

With only $24.5 billion left in FX reserves after valiantly defending major capital outflows since the Fed’s Taper announcement, the Kazakhstan central bank has devalued the currency (Tenge) by 19% – its largest adjustment since 2009. At 185 KZT to the USD, this is the weakest the currency has ever been as the central bank cites weakness in the Russian Ruble and “speculation” against its currency as drivers of the outflows (which will be “exhausted” by this devaluation according to the bank). The new level will improve the country’s competitiveness (they are potassium heavy) but one wonders whether, unless Yellen folds whether it will help the outflows at all. The Kazakhstan stock index is up 12% on the news…

Kazakhstan Devalues Currency To Weakest On Record

Via Bloomberg,

The tenge, introduced in 1993 after the breakup of the Soviet Union two years earlier, weakened the most against the dollar last month since July. Kazakhstan devalued its currency by 21 percent in February 2009, as the biggest energy producer in central Asia spent billions of dollars to support the economy and bail out its biggest lenders following the collapse of Lehman Brothers Holdings Inc.

The devaluation was a surprise for many people, considering the central bank’s assurances that the exchange rate is stable,” Damir Seisebayev, director of the analytical department at ?? Private Asset Management in Almaty, said by e-mail. “But you have to be realistic. What is the tenge? It’s the ruble rate multiplied by five. This is a tested formula.”

The Kazakhstan Stock Exchange gained 12 percent after the announcement, data on the bourse’s website show.

So it must be great news, right? Just as Venezuelan stock holders…

The move reflects a combination of factors, including the steady deterioration in the current-account position, worries over the impact of weak growth in Russia and the ruble’s managed depreciation,” Tim Ash, chief emerging-markets economist at Standard Bank Group Plc. in London, said in a note today.

Charts: Bloomberg

1 thought on “Kazakhstan Devalues Currency To Weakest On Record

  1. It is happening to US dollars every day…..they just hide it. Just look at food, shelter and energy costs…….the US consumer is being impoverished cheap dollar at a time…….abolish the FED is a great idea, but I fear it is too late……the global economy is in collapse.
    When banking systems can no longer be trusted, the entire system goes to hell. Since all the banks are international, all the debt is global……the only outcome is global………collapse.
    World annual GDP is averaged at $50-65 trillion, using their numbers (which are probably highly inflated). The amount of debt and currency production is in the hundreds of trillions. Money can only be solid if it truly represents the real worth and value of a nation.
    Standard business practice is to take $100 million and leverage it into $100 Billion………1000:1 ratio. Now, they are leveraging the leveraged funds…….I will let someone else do the math…..but it cannot hold much longer.
    This is just one more domino falling. If Russia cannot sell bonds, and all these other nations are having bank closings and holidays, it tells me the crisis point has finally been reached.
    Did anyone else notice how quietly and quickly the congress raised the debt level? They are getting scared? Less than half of world transactions now involve the dollar, and the number of nations no longer using it is staggering…..and the number will continue to grow. From 100% in Jan. 2010 to 50% in Jan 2014…………the amount of nations using the dollar has dropped by half. That is a huge hit.
    The house of paper and smoke is finally catching fire.

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