At the end of February, Kazakhstan’s national currency showed cautious but notable strengthening.
The tenge appreciated by 0.7%, reaching 497.69 per US dollar — a modest shift that reflects a month of relatively stable dynamics in the foreign exchange market, DKNews.kz reports.
Behind this movement lies a combination of market activity, state budget transfers, and carefully balanced actions by the National Bank.
Trading Activity Rises: What It Means
February saw a significant increase in trading activity on the Kazakhstan Stock Exchange (KASE). The average daily trading volume rose from 306 million to 335 million US dollars. Over the entire month, total trading reached 6.7 billion dollars.
For context, rising trading volumes often indicate stronger participation from both domestic and foreign market players. Higher liquidity typically reduces volatility risks and signals greater confidence in currency operations.
In simple terms: more dollars were being traded, but the market absorbed them smoothly.
National Fund Sales: Budget Support Without Market Pressure
A key factor in February was foreign currency sales from the National Fund, which totaled 400 million US dollars. These funds were used to finance transfers to the republican budget.
Importantly, these sales represented just 6% of total trading volume — no more than 20 million dollars per day. This relatively small share helped prevent excessive pressure on the exchange rate.
The National Bank emphasizes that all operations were conducted under the principle of market neutrality — meaning it avoids sudden or aggressive interventions that could distort pricing.
For March, foreign currency sales from the National Fund are expected to range between 400 and 500 million dollars, according to preliminary government forecasts.
Mirroring Mechanism: Sterilization in Action
Another significant operation in February involved the so-called “mirroring mechanism.” During the month, 350 billion tenge was sterilized — essentially withdrawn from circulation to manage liquidity and inflation risks.
In March, similar foreign currency sales equivalent to approximately 350 billion tenge are expected to continue under this mechanism.
While the term may sound technical, the goal is straightforward: balance the money supply to prevent excessive inflation or destabilizing capital flows.
No Currency Interventions
Notably, the National Bank did not conduct any direct currency interventions in February.
This is important. When central banks intervene, they directly buy or sell currency to influence the exchange rate. The absence of such interventions suggests that the tenge’s appreciation occurred under natural market conditions rather than artificial support.
Quasi-Government Sector Sales
Additionally, under the mandatory sale requirement, quasi-government sector entities sold approximately 284 million dollars in foreign currency revenue.
These regular conversions add supply to the market and contribute to overall currency liquidity.
UAPF: No Dollar Purchases
The National Bank also confirmed that it did not purchase US dollars for the Unified Accumulative Pension Fund (UAPF) investment portfolio in February. The reason is simple: the share of foreign currency assets in the fund already exceeds 40%.
Currency purchases are not planned for March either.
This reduces additional demand for dollars and may further support exchange rate stability in the near term.
What Will Drive the Tenge in March?
According to the National Bank, several factors will determine the tenge’s trajectory in the short term:
- Market expectations
- Quarterly tax payments
- Global market conditions
- Geopolitical developments
Tax periods often strengthen the tenge temporarily, as companies convert foreign currency earnings into tenge to meet obligations.
At the same time, global oil prices and geopolitical risks remain powerful external variables that Kazakhstan cannot fully control.
Flexible Exchange Rate Remains the Core Policy
The National Bank reaffirmed its commitment to a flexible exchange rate regime. The goal is to prevent long-term imbalances and preserve gold and foreign exchange reserves.
In practice, this means the tenge will continue to reflect supply and demand dynamics rather than being artificially fixed.
For now, February’s data paints a picture of controlled liquidity, predictable budget financing, and moderate strengthening of the national currency — without heavy-handed intervention.
Whether March continues this trend will depend not only on domestic measures, but also on global economic winds.
One thing is clear: the regulator is prioritizing transparency and steady, measured action over abrupt moves.
And for businesses, investors, and households watching the exchange rate, stability — even modest stability — is often the most important signal of all.
