Kazakhstan's under-pressure tenge loses more than a quarter of its value after the oil producing central Asian nation, hit by a sharp fall in world crude prices, introduces a freely floating exchange rate for the currency. Amy Pollock reports.
The latest casualty in what looks to some like a currency war hitting emerging markets - Kazakhstan. The government's ditched the tenge's trading band stretched by sliding oil and metal prices. It comes as Central Asia's largest economy struggles to deal with a wave of devaluations and depreciations by its neighbours, Russia and now China. After the move the official tenge rate tumbled 26 percent to 255 to the U.S. dollar Some say the government should have acted sooner. (SOUNDBITE) (Russian) ALMATY RESIDENT, MIKHAIL MEYRZHANOV, SAYING: "This should have been done a long time ago, at the beginning of the year, when the rouble fell twice... Nevertheless it was very unexpected for many and provoked a big rush." Although fears remain that the Kazakh move will prompt similar action among its trading rivals, not everyone thinks China has started a full-blown currency war. Craig Erlam is from Oanda. (SOUNDBITE) (English) CRAIG ERLAM, SENIOR MARKET ANALYST, OANDA, SAYING: "This doesn't strike me as a currency war, this strikes me as central banks acting as the fundamentals dictate, not because they intentionally want to weaken their currencies." The float was welcomed by Kazakh oil and mining firms. The tenge's tumble allowed copper producer Kaz Minerals to cut cost forecasts, pushing the share price up 13 percent.