Kazakh tenge strengthening due to market factors - National Bank

ASTANA. Feb 19 (Interfax) - The tenge, Kazakhstan's national currency, is strengthening solely due to market factors, Deputy Chairman of the National Bank of Kazakhstan Berik Sholpankulov said.

"The National Bank has always said we are not the main participant in the foreign exchange process. We have declared that tenge is a freely convertible currency, and developments in the foreign exchange market are driven by supply and demand," Sholpankulov told reporters on Thursday on the sidelines of the Senate meeting, the upper house of parliament.

He said that demand for dollars had declined while supply has increased, leading to a lower exchange rate. In his view, these are purely economic processes.

Asked whether there could be a sharp swing in the near future, he suggested monitoring the situation in external markets and assessing overall market dynamics.

"This is not the regulator's influence; it is the supply and demand of market participants that determines the exchange rate," Sholpankulov said.

It was earlier reported that a nationwide referendum on adopting a new Constitution of Kazakhstan is scheduled for March 15.

A number of Kazakh experts said the tenge's strengthening at the beginning of the year is seasonal and linked to the tax period, when large exporting companies sell foreign currency earnings and buy tenge. The tax period typically runs from mid-February through the end of March.

The tenge has been rising steadily against the dollar since January 5. According to Kazakhstan Stock Exchange data, the rate has strengthened from 505 tenge/$1, to 489.28 tenge/$1 on February 18.