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№2 (235) 28 January - 10 February 2009

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Public is still hesitating. It doesn't know how to react to the appointment of Grigoriy Marchenko to the post of the head of the national bank. This news hit headlines. If it were not for harsh economic environment Kazakhstan has to operate in now, people would remain indifferent to the cabinet reshuffling. Marchenko has a reputation of the skilled financier and he held aforementioned job between 1991-2004. Kazakh society is deeply concerned about its future. What financial strategy will choose the National Bank? What monetary policies the government will elaborate to respond the crisis. What fate might befall tenge?

Sultan Akimbekov

The National Bank does its best to adjust its policies to harsh economic environment and sort out things that go amiss. The government should take into consideration all factors including interests of the majority of people living in Kazakhstan. Kazakh businesses and households has got accustomed to calculate their income in dollar terms. While processing the data they easily operate both currencies: dollar and tenge. In Russia ruble lost in value dramatically. It slid from 23 to 33 rubles against dollar. Kazakhs are also uncertain about their future.

Marchenko's predecessor Anvar Saidenov claimed that the state would tighten economic policies and won't let tenge to depreciate. Tenge is pegged to dollar de facto and it floats free against ruble . The pressure on the local currency aggravated since the prices for raw materials declined nearly twofold. Exporters lost considerable profits. Russia won't welcome policy of stable tenge, because the gap in salaries and pensions of Kazakhs if calculated in dollar terms and those of Russians is increasing.

Bahit Sultanov the Minister of Economy and budget planning hinted on the posiblity of tenge devaluation. In his interview on Habar TV channel he supported monetary strategy of the government and then he said that tenge might move lower and lose 10% of its value but not more. This statement has scared the public.

The Minister should inform the society about ramifications of the possible shifts in the political course. People should secure themselves against risks. Slight decline in value of the national currency is unlikely to result in the economic disaster. Such controversial words can cause panic among the population. Russia has given us a good example of what dire consequences panic may lead to. Russian households and businesses started to buy dollars, thus increasing the pressure on ruble. Kazakh society has much in common with the Russian one and people are prone to worry about different things they are exposed to panic. Meanwhile, our state hasn't created any ground for this yet.

Marchenko takes over finance during economic recession. So he will be held accountable for monetary policy and anything that might happen to tenge. At least we could judge by Saidenov's words that tenge would remain stable currency. In the case of Marchenko we have no any information. What are relations of new head of the National Bank with the lobby of exporters, the group that denounced policies of Marchenko predecessor, who staked on stable and relatively strong tenge? Exporters would prefer depreciated tenge and policies embraced by the central bank of Russia aimed at ruble tumble. Mr Marchenko held the job of the chairman of the National Bank in 2004 and those days he developed close ties with the exporters of crude oil. According to our sources, in his letter to the cabinet written last year Mr. Marchenko criticized officials for their attempt to force the bank he headed to set aside sufficient capital. It was typical case of the leak. Why the text of the letter at least his words about capitalization emerged on the internet site? What organization failed to close the breach in information security? Which entity could get an advantage of such a leak?

It is not a sheer coincidence that Marchenko has to take charge of the financial sector now, when economy is facing such difficulties. Marchenko is not on good terms with financiers. This person also hates to give interviews, so he is not popular with journalists as well. In one word he is the best candidate for implementing unpopular monetary policies. The state has to respond the crisis somehow. Between January 12-15 officials declared that the state has to use economic regulators to face new threats such as: drop in value of currencies of the countries Kazakhstan borders on, cheap imports and moderate revenues from export, scarce money supply etc.

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