In February, Kazakhstan faced a problem: many exchange offices closed and stores of building materials, computer and household appliances stopped functioning. The National Bank of the country on the 11th officially announced that the tenge was devalued . The currency of Kazakhstan has fallen sharply against the dollar.
Not only the most popular categories of
consumer goods were attacked
, but also the country's automobile market. He suspended his activities until the situation stabilizes, and the largest dealers in the industry, such as Merkur Auto, Bipek Auto and AllurAuto, resorted to this measure.
Government action
In such a critical situation, the government chose not to intervene and stated that it was not going to artificially restrain price increases from the country's resources. The dollar exchange rate existing at that time (145-155 tenge per 1 dollar) soared immediately by 30-40 points. Later, the exchange rate did not stop and reached 200 tenge per dollar.
Kairat Kelimbetov, the head of the main Kazakhstani bank, told the media that now measures will be taken and the situation will be resolved, and those who try to speculate on the current state of things will face severe punishment. He was referring to exchangers who are trying to keep their course in top position.
Consequences of devaluation
In the process of resolving the situation, the national currency was kept at around 163 tenge per 1 dollar. This amounted to as much as 20% of inflation instead of the planned 8%. As measures of influence on the exchange rate, it was necessary to reduce interventions in national money. Analysts noted that they had to act almost intuitively, not knowing how the Russian ruble will behave in this position, which also has an impact on the national currency of Kazakhstan. They noted that, despite some difficulties, there will be no restrictions on conducting foreign exchange transactions in the country.
Stability and once again stability
Kazakhstan has a rather stable position, as it is the only CIS entity that has formed a very long-term economic strategy, up to 2030.
One of the stages in the development of a state is its entry into the WTO. It is also planned to achieve a position in the world ranking of powers no lower than the 50th position. Even Russia is equal to the Kazakhstani strategy in some positions. This could be observed in the situation with the establishment of the Stabilization Fund. Kazakhstan formed this structure 2 years before the Russian government resorted to this initiative. Such measures are quite capable of helping to stabilize the crisis in difficult economic situations, including affecting the default in Kazakhstan in 2014.
Forecasts
Problems and projected default in Kazakhstan can be eliminated at the expense of the fund. This is a kind of reserve for a rainy day, which allows you to minimize the risks of tension in the country's economy, including those provoked by the social situation. Such factors may include increases in property prices and necessary products. These measures have already helped during the 2008 banking crisis , when US mortgage lending was undermined by large amounts of defaults.
Then not only domestic, but also foreign markets of Kazakhstan suffered. The situation seemed global, especially in the context of the loss of interest of world powers in investing in the country's economic programs. But, fortunately, analysts' forecasts are more than comforting. Kazakhstan is part of the Asian zone, which in the next 10 years should rapidly develop and, as a result, get ahead of many Western powers, despite temporary difficulties. Such prospects are possible, since there are plenty of resources for development in the country, and the West has been too conservative in recent years.
Possible problems
The financial system of Kazakhstan foresees several problems that it, however, can solve, according to analysts. Foreign banks require about $ 11 billion annually from Kazakhstan partners, and for this it will be necessary to refinance at least part of the loans and borrowings, and a significant, at least 70%, this with a total debt of $ 80 billion for 2008. This situation inevitably affects the situation of internal lending, on which the development of the country's business structures depends. A default in Kazakhstan may well be a consequence of the impact of the external debt situation. Government projects to develop the economy in this situation may be in jeopardy. Banks are definitely trying to increase the flow of funds at the expense of the population, raising interest rates, including for small businesses, thereby increasing prices in Kazakhstan in the service sector.
Who will suffer?
The default in Kazakhstan had the greatest impact on the building materials market. This situation has been brewing for a long time. The banks of the country provoked a crisis in the construction sector, as they ceased to support mortgage lending. They do not have enough funds for independent implementation of the program of cheap housing, and foreign investment has declined significantly.
Western Europe and the United States are ready to issue loans, but mortgage interest will not cover part of the payment for them. The price of foreign loans is overstated, so in the country mortgage programs remained available only to employees of budgetary organizations (teachers, doctors, officials, etc.). Support is also provided to a specific list of young families in order to increase the birth rate. Thousands of construction projects across the country simply stopped, resulting in an increase in unemployment. The so-called redistribution of spheres of influence in the economy has occurred. Some politicians are even glad of such a state of affairs when only the largest companies remained on the developers' market. The situation was complicated by the protests of ordinary citizens who acted as interest holders in frozen facilities. But there is no silver lining, because banks were forced to offer investors more income to attract free funds of the population, in order to somehow rectify the situation.
Country rating
The country is in a tense situation, but domestic analysts give positive forecasts. At the same time, world experts are talking about an even greater deterioration of the situation, the fault of which is the default in Kazakhstan. However, according to many politicians, these are temporary difficulties, and the country's global goals have simply receded into the background. As far back as 2009, the government allocated about $ 4 billion to stabilization programs. Although this is an insignificant amount for stabilization, a small growth in the economy after this was noted.
Government promises
The government promises to restrain the onslaught as much as it can, at the level of no more than 10% of inflation. The part of the population that will be most affected by the crisis belongs to a fairly new layer of young specialists in sales and services, as well as employees of small enterprises and entrepreneurs. The national currency of Kazakhstan may stop falling, but prices can no longer be fixed at one mark. They will inevitably grow, driving the population into distress. The government guarantees that the most negative scenarios can be avoided. For banks, this state of affairs could turn into a massive closure.
Crisis Management Measures
The Parliament of Kazakhstan laid all responsibility on the Government and demanded the adoption of the most innovative measures. Parliamentarians rightly consider the closure of the mortgage lending program a threat to the stability of the state. They are well aware that the average resident will not be able to afford to buy housing for his salary, which at best reaches the level of 700-750 dollars.
And this, in turn, will lead to new problems not only in the field of housing provision - the entire
economy of Kazakhstan as a whole will suffer. Deputies cannot justify the cessation of housing programs and demand the resumption of state support for the population in this important area. The collapse of the construction business and the housing market jeopardizes such areas of the economy as mining companies, which may face an overproduction crisis at some point. In light of this, foreign supplies of raw materials should be reduced as much as possible, giving priority only to state enterprises. Thus, internal reserves will be aimed at solving the most important problems, which, in turn, will provide a chain reaction to overcome the current crisis situation in the country. Kazakhstan hopes to get out of the water dry only on its own.