Crossroads Asia

Why Is Kazakhstan’s Currency the World’s Most Volatile?

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Crossroads Asia

Why Is Kazakhstan’s Currency the World’s Most Volatile?

Nazarbayev promised there would be “no upheavals” but the global economy had other plans.

Why Is Kazakhstan’s Currency the World’s Most Volatile?
Credit: Kazakh tenge via Shutterstock.com

Earlier this summer, Kazakhstan lost out on claiming Central Asia’s first Olympics, coming up short against Beijing. Now, though, Kazakhstan can boast a new — and far more dubious — honor. According to Bloomberg, Astana now hosts the world’s “most volatile currency,” with fluctuations in Kazakhstan’s tenge outpacing those of Russia’s ruble and Ukraine’s hryvnia to take the dubious title.

While the ruble’s decline has proven steeper than the tenge’s over the past 12 months – a 41 percent drop against a 33 percent drop, respectively – Kazakhstan’s recent currency swings have whipsawed its citizens’ savings. The currency rested at 185 per dollar in August, but the tenge plummeted in the wake of China’s yuan devaluation, bottoming out at some 300 per dollar a few weeks ago before recovering to 273 per dollar. In moving to a free float, the currency has collapsed nearly 100 percent over the past 20 months.

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