bne:Chart – Bank deposits show Kazakhs fear another devaluation

By bne IntelliNews February 12, 2015

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Kazakhstan has carried out two sharp devaluations of the national currency over the past six years, both in in the month of February. With the low oil price and the weak currency of the country's main trading partner Russia, pressure is building on the central bank for another February devaluation. Kazakhs certainly seem to think so if retail deposits – a good indicator of the population's trust in the national currency – are anything to go by.

The bne:Chart shows that Kazakh depositors had more money saved in the tenge in 2008 before the crisis hit and the 2009 devaluation, after which they rushed to convert their savings into foreign currency. The situation had stabilised the following year and Kazakhs' trust in the tenge stabilised somewhat until 2014, when the 2009 situation repeated itself. At the end of 2014, over two-thirds of Kazakh retail deposits were in foreign currency.

Although no official data for January 2015 have yet been published, few believe the deposit situation has reversed; in fact some experts estimate the share of retail deposits in foreign currency has grown to around 90% at the moment, implying that Kazakhs believe another devaluation is on the cards. 

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