Kazakh president pledges to prevent bank failures

By bne IntelliNews February 24, 2014

bne -

The Kazakh government will prevent any domestic banks from collapsing, President Nursultan Nazarbayev told a government meeting on February 21.

Concerns about the stability of the Kazakh banking sector have been growing since the devaluation of the tenge on February 11 was followed by a run on three major banks. Nazarbayev said that local banks "will not go bankrupt" and that the government will "guarantee the safety of people's savings."

"As for those who provoked recent financial distress in some banks of Kazakhstan, they have already been found and would be held liable. What we all want is peace and stability in Kazakhstan and this is a goal for the entire nation," he added, according to a statement on the presidential website.

On February 19, hundreds of people queued at branches of Alliance Bank, Bank CenterCredit and Kaspi Bank in an attempt to withdraw money from hard currency accounts. Panic spread as some branches refused to return deposits and stocks of cash ran short. While the rush has since slowed, Kaspi reports that over $200m was withdrawn from its accounts.

Several people have been arrested in Almaty on suspicion of causing the bank run by sending out thousands of SMSs and WhatsApp messages claiming the banks were about to collapse.

Concerns about the stability of the Kazakh financial system have been growing since a 19% devaluation of the national currency, the tenge, was announced, despite efforts by the government and central bank to reassure the population and maintain price stability.

Notice: Undefined index: social in /var/www/html/application/views/scripts/index/article.phtml on line 259

Related Articles

Retail trade slows in Kazakhstan amid economic uncertainty

Naubet Bisenov in Almaty - A free-floating exchange regime for Kazakhstan’s currency, the tenge, is taking its toll on retail trade as the cost of imports rise. While prices have not changed ... more

bne:Chart - Russia begins to steady the ship according to latest Despair Index

Henry Kirby in London - Ukraine and Russia’s latest “Despair Index” scores suggest that the two struggling economies could finally be turning the corner, following nearly two years of steady ... more

New Kazakh central bank governor re-adopts free floating regime

bne IntelliNews -   The National Bank of Kazakhstan, the central bank, has re-adopted a free-floating exchange regime under the new governor, Daniyar Akishev, who has ... more