Kazakh Central Bank Committed to Dollars

While Russian government officials parse the ins and outs of dollar diplomacy, Kazakh Central Bank Governor Grigory Marchenko said in no uncertain terms in London today that Kazakhstan is a ready buyer of dollars for at least the rest of the year. What he specifically told Reuters:

“Now we have been buying dollars in small quantities. There are more petrodollars flowing in the country, and exchange rates have been stable and we don’t see any threat. Actually we believe we will be buying more dollars until the end of the year but we will maintain this medium term band of 150 tenge plus/minus 5 tenge.”

This intention relies at least in part on commodity prices maintaining more or less at their current levels. Looking deeper at Kazakhstan’s current economic outlook, Bloomberg’s latest on the country’s IMF needs, or lack thereof, seems to cover all the bases.

Two things unmentioned in all of this that jump out at me. First, Bloomberg’s $43 billion quote for Kazakhstan’s reserves strikes me as very high. I am assuming that includes the country’s sovereign wealth fund holdings, which stood somewhere in the $25 billion range in their own right before economic crisis came to central Asia. Second, I recall watching in person Kazakhstan’s Planning Minister last fall say that as long as the price of oil remains above $65, the country’s sovereign wealth fund would still grow by $9 billion annually (this was when the price of oil was just above $100).