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Head of National Bank of Kazakhstan assesses impact of sanctions on national financial market
The sanctions imposed against Russia by the West and the weaker ruble affect the domestic economy and payment market dramatically, Kazakhstan National Bank Chairman Galymzhan Pirmatov stated when speaking at a government meeting.
“Kazakhstan is a member of the Eurasian Economic Union. The Russian Federation is our key trading partner, accounting for 42% of Kazakhstani imports. In this regard, the aggravation of the geopolitical situation and the sanctions imposed against Russia affect our economy as well. As a result of a significant weakening of the Russian ruble, the financial market of Kazakhstan is facing a growing pressure,” Galymzhan Pirmatov is quoted as saying by Kazinform.
To minimize the negative consequences, the National Bank plans to implement a package of measures aimed at mitigating the risks of inflation growth, protecting tenge savings and prudent use of the country's gold and foreign currency reserves. If the situation deteriorates further, the regulator will have to take measures to ensure economic stability.
The head of the National Bank noted that all operations of Kazakhstani banks within the country are carried out in the ordinary and usual course. Alternative settlement mechanisms for cross-border transactions of Russian banks’ clients are prepared.
“The National Bank will keep to adhere to the inflation targeting regime with a free-floating exchange rate, without hindering the formation of market exchange rates and excluding targeting a certain level of the exchange rate. At the same time, we will carry out FX interventions, if the risks to financial stability grow,” Galymzhan Pirmatov said.