In October, the tenge strengthened by 3.5% to ₸529.96 per US dollar, while the average daily trading volume on KASE grew from $248 million to $271 million, with total monthly turnover reaching $6 billion. The National Fund sold $660 million (about 11% of market volume), and no interventions were conducted. Here’s what that means for November - with full figures and analysis, DKNews.kz reports.
Key Takeaways
- Exchange rate: +3.5% for the tenge, closing at ₸529.96 per US dollar.
- Liquidity: Average daily trading volume on KASE rose from $248 million to $271 million (≈+9%).
- Total volume: $6 billion traded during the month.
- National Fund: Sold $660 million (≈$30 million daily, about 11% of total volume).
- November outlook: Expected National Fund sales – $600–700 million.
- Mirror operations: ₸475 billion sterilized in October; similar sales (₸475 billion equivalent) expected in November.
- FX interventions: None conducted.
- Quasi-state sector: Mandatory foreign currency sales – $279 million.
- UAPF: Foreign assets remain around 40%; no FX purchases in October or November.
- Policy stance: Market neutrality and a flexible exchange rate regime remain intact.
The Tenge’s October Dynamics: Strengthening on Real Flows
In October, the tenge appreciated by 3.5%, closing at ₸529.96 per dollar. Trading activity increased significantly - average daily volume on the Kazakhstan Stock Exchange rose from $248 million to $271 million, with total turnover reaching $6 billion.
This reflects two clear trends:
- Seasonal and export-related factors boosted FX supply.
- Market participants actively rebalanced and hedged positions, restoring healthy liquidity levels.
National Fund Sales: 11% of the Market, Without Distortion
The National Fund of Kazakhstan sold $660 million in October. These proceeds were used to finance budget transfers and the construction of the Taldykorgan–Usharal gas pipeline.
The Fund’s share of monthly FX trading reached about 11%, or roughly $30 million per day, evenly distributed across sessions. This ensured steady fiscal support without pressuring the exchange rate.
Looking ahead: Based on government funding requests and expected fiscal inflows, the National Bank plans to sell $600–700 million from the National Fund in November. The range provides flexibility to adjust to changing market flows and liquidity conditions.
Mirror Operations and Sterilization: ₸475 Billion and Counting
Through mirror operations, the National Bank sterilized ₸475 billion in October. The same amount - equivalent to ₸475 billion - is expected to be sterilized again in November through FX sales.
These operations allow the Bank to manage fiscal liquidity neutrally, preventing excessive money supply growth and avoiding unnecessary pressure on the exchange rate.
No FX Interventions: A Sign of Market Balance
Importantly, the National Bank did not intervene in the FX market in October. This indicates that supply and demand were balanced naturally. The Bank limited its actions to regular, even-paced FX sales under fiscal and sterilization programs, maintaining market neutrality.
Quasi-State Sector: $279 Million from Mandatory FX Sales
Under the mandatory FX conversion rule for quasi-state entities, around $279 million entered the market in October. This additional supply helped smooth intra-month volatility, especially during the corporate tax payment period.
UAPF: No Currency Purchases in Pension Assets
In line with earlier guidance, and considering that foreign assets make up roughly 40% of the Unified Accumulative Pension Fund’s (UAPF) portfolio, the National Bank did not purchase US dollars for pension investments in October.
No purchases are planned for November either. This decision helps maintain market stability and avoids unnecessary liquidity shifts during the peak budget season.
The National Bank’s Approach: Neutral and Transparent
In all its FX operations - both National Fund sales and mirror operations - the National Bank adheres to the principle of market neutrality: transactions are regular, balanced, and predictable, without targeting specific exchange rate levels.
Transparency remains a cornerstone of policy. The Bank will continue to fully disclose information on its FX operations, supporting confidence and reducing market uncertainty.
What Will Influence the Tenge in the Coming Weeks
In the short term, the tenge’s movement will depend on four main factors:
- Market expectations (importers’ and exporters’ behavior, household demand).
- Quarterly tax payments (temporary increase in FX supply).
- Global market conditions (commodity prices, US dollar index, interest rates).
- Geopolitical developments (risk sentiment and volatility).
The National Bank continues to follow a flexible exchange rate regime – this approach prevents macroeconomic imbalances and preserves reserves, avoiding unnecessary FX spending to maintain a fixed rate.
What It Means for Businesses and Households
- Importers: October showed that the tenge can strengthen under a neutral policy stance. It’s advisable to plan payments in advance and use hedging tools to manage FX exposure.
- Exporters: Consistent FX sales by the National Fund and quasi-state companies support liquidity - spreading conversion operations across time remains a prudent strategy.
- Investors and savers: The absence of interventions confirms the market-driven nature of the tenge’s dynamics. Diversification across currencies and instruments remains key.
For the tenge, October was marked by appreciation without interventions, growing market turnover, and transparent fiscal operations via the National Fund and mirror mechanisms.
Heading into November, the market faces a clear setup: $600–700 million in planned National Fund FX sales, ₸475 billion through mirror operations, and no FX purchases by the UAPF. In this context, tax-related inflows and external market trends will be the key drivers of the exchange rate.
As the year-end approaches, liquidity conditions, the tax calendar, and global price movements will define the tenge’s trajectory.
