Kazakh tenge weakens after Doha meeting fails to bring results

By bne IntelliNews April 19, 2016

The Kazakh national currency, the tenge, weakened against the dollar following a drop in the oil price after no agreement on production freeze was reached by Opec and non-Opec producers in Doha on April 17. The exchange rate rose from KZT334.16 on April 15 to KZT340.44 on April 18.

The tenge weakened after oil producers failed to achieve an agreement on freezing oil output after Iran decided to ignore the meeting of Opec and other oil producers in Doha. The failure sent the Brent oil price below $42 per barrel (4.20% down) on April 18. The prospects for reaching the deal are rather blurred given the standoff between Saudi Arabia and Iran, which means that the oil price will struggle to increase, putting pressure on the tenge. The Kazakh currency strengthened by 13.1% between January 21, when it touched a historical low of KZT384.48 against the dollar, and April 15.

According to Kazakh Energy Minister Kanat Bozumbayev, who participated in the meeting, it was agreed that OPEC members must first achieve an agreement within themselves before trying to convince the other oil producing countries to freeze output. Another meeting of the cartel members is expected in June. Kazakhstan has observer status in Opec. 

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