KZT - Kazakhstani Tenge

The history of the formation and development of the Kazakhstani Tenge (KZT)

In 1991, after the dissolution of the Soviet Union, Kazakhstan declared independence and began building its own financial and banking system.

On November 15, 1993, Kazakhstan officially issued the Tenge, replacing the previous Russian Ruble. With the aim of establishing an independent economy and not being dependent on the Russian financial system. With the exchange rate of:

1 Tenge = 500 Russian Rubles

In 2006, Kazakhstan issued a new version of the Tenge with a modern design that included anti-counterfeiting security measures.

In 2015, the National Bank of Kazakhstan decided to float the exchange rate of the Tenge, shifting from a fixed exchange rate regime to a flexible one. This helps Kazakhstan better adapt to fluctuations in the oil market and the global economy.

Kazakhstani Tenge (KZT) Denominations

Currently, the Kazakhstan Tenge is issued in various denominations, including coins and banknotes. Below are the denominations currently in circulation:

Kazakhstani Tenge banknotes

• ₸200

• ₸500

• ₸1,000

• ₸2,000

• ₸5,000

• ₸10,000

Banknotes have a higher value and are designed with important images and symbols of Kazakhstan.Banknotes have a higher value and are designed with important images and symbols of Kazakhstan.

Kazakhstani Tenge coins

Commonly used: ₸5, ₸10, ₸20, ₸50, ₸100, ₸200

Rarely used: ₸1, ₸2

Coins are issued in denominations smaller than the Tenge. Depending on the denomination, the material and size of the coins vary.

Kazakhstani Tenge (KZT) exchange rate

The exchange rate of the Kazakh Tenge against the US Dollar, Euro, and British Pound:

• 1 KZT = 0,00205 USD

• 1 KZT = 0,0019 EUR

• 1 KZT = 0,0016 GBP

This exchange rate shows that the Tenge has a relatively low value compared to strong currencies like the USD, EUR, and GBP because Kazakhstan's economy relies on resource exports and is significantly affected by factors such as energy prices and global fluctuations.

Factors affecting the value of Kazakhstani Tenge (KZT)

Below are the factors affecting the value of the Kazakhstani Tenge that create significant volatility in the financial market: 

Kazakhstan depends on the export of oil and gas

Kazakhstan is a country rich in natural resources, especially gas and oil. The economy of this country heavily depends on energy exports. Therefore, if the prices of oil and gas on the international market decrease, it will put significant pressure on the Tenge, causing the value of this currency to drop.

High inflation situation

Kazakhstan frequently faces high inflation rates, causing its national currency to depreciate. The inflation situation reduces the purchasing power of the Tenge, causing both the local people and international investors to lose faith in this currency, thereby decreasing its value in the international market.

Fluctuations in international exchange rates

The exchange rate of the KZT is severely affected by strong currencies in the world such as USD, EUR, or GBP. When these currencies appreciate, the KZT usually depreciates. The economies of developed countries like the United States are more stable and resilient compared to Kazakhstan. Therefore, the exchange rate between the KZT and USD has a significant difference.

Economic and political instability

Domestic political and economic instability factors have caused the KZT to depreciate. Ineffective economic management or unstable monetary policies both reduce the value of the Tenge. This causes international investors to lose confidence in investing in the KZT.

Weak foreign exchange reserves

The foreign exchange reserves of the Central Bank of Kazakhstan are relatively weak compared to other countries. This limits the government's ability to intervene in the foreign exchange market to maintain the value of the domestic currency, making the Tenge susceptible to external factors.

Thus, it can be seen that the Kazakhstani Tenge is significantly affected by the economy and global factors, causing the KZT to have a low value compared to strong currencies around the world.

Future of Kazakhstani Tenge (KZT)

The future of the Kazakhstani Tenge (KZT) is poised to be influenced by a confluence of domestic economic policies and external geopolitical factors. As Kazakhstan continues to diversify its economy, particularly through initiatives aimed at enhancing technological innovation and increasing foreign direct investment, the stability and global perception of the Tenge will be critical. Furthermore, ongoing fluctuations in oil prices, given Kazakhstan's significant dependence on energy exports, will likely impact the currency's value and overall monetary policy. Additionally, the Central Bank of Kazakhstan's commitment to maintaining an inflation target and ensuring currency stability will be pivotal in fostering investor confidence and promoting sustainable economic growth. In this context, the Tenge's trajectory will reflect broader economic reforms and the nation's adaptability to a rapidly changing global landscape.