Kazakhstan: Devaluation and Blogospghere

On February 4, the National Bank of Kazakhstan ceased maintenance of the national currency tenge (KZT). The measures on retention of the overestimated exchange rate during the last 6 months has cost nearly $6 billion, while national currencies in the neighboring countries have dropped down significantly. The new exchange rate fixed by the National Bank is KZТ150 to $1, which marks a 25% devaluation. Although the need for devaluation was quite obvious, the population's major dissatisfaction is caused by the fact that a couple of weeks before abrupt collapse of the exchange rate, the government had officially announced its intention to run a 10% – and gradual! – devaluation.

Thу bloggers reacted in different ways. Dubanoze is happy that he had not had considerable savings [ru]:

It’s good I have almost no money… so I don’t have a headache as my colleagues do.

Pulemetchizza, as many others, remembers that it was not the first default for Kazakhstan [ru]:

I have a déjà vu: the same thing happened in 1999. Didn't we survive then? So we shall survive this time too. However, frankly speaking, I'm a bit distressed.

nashingyou reflects on the suddenness of devaluation [ru]:

I am not sure what would be better: if the exchange rate gradually grew up to the current index, or if it jumped – as it actually did. I think, the second option was selected for one good reason – it is better that people are thunderstruck once, rather they would have undergone this stress during a month or two.

Meanwhile, 4uni-muni is surprised at the people's reaction: [ru]:

Our people are amazing. They watched news, noticed that ruble went down, and they still thought that it would not happen to us. “Of course it’s because Russians are stupid! Our government is smarter. This will never happen to us”…

Now, after devaluation, the citizens are anxiously expecting new upsurge of inflation. Pari-from-kz writes [ru]:

I am nervous because of the situation with the currency. I don’t want to discuss it, I am just angry, because it is clear that despite anything that politicians say, the prices will jump ubiquitously.

And this is already happening – the shops that sell electronics and home appliances were the first ones that were immediately closed for price change:

“I just don't understand why they did so. They had bought their stuff before the rate went up. Sure, now they will have more costs, and nobody in the West, Europe or China is going to make a special discount for them in future. But why do they change prices now?”, temza8 asks in perplexity [ru].

The next in a row were pharmacies and supermarkets:

“I understand why devaluation is necessary, but I am not that emotionally strong to watch what happens near pharmacies, where elderly people find new prices that are almost unaffordable for them! The price for bread from some bakeries grew by 20 KZT [30%]”, aslili wrote [ru].

In this regard eev rhetorically exclaims [ru]:

Everyone says that devaluation has a positive effect on the economy. But, taking into account that stores have immediately increased their prices by 25%, what is positive for our economy? I would not believe that only imported goods would grow in price. I bet that local goods will become more expensive too. So, what's the advantage?

The signs of panic, such as: agiotage purchases and artificial deficit, were already, though not massively, noticed in Kazakhstan:

In the morning [of the first day of devaluation] my colleague stopped by a shop. There was nothing except for bread, vodka and canned food. The salesman said that they had hidden the rest of the goods until the exchange rate settles”,

pinkpanter-vs writes from Karaganda [ru]

We became 25% poorer. Lately the salaries of budget-paid employees and pensions were increased by 25%, and now this raise is eaten up. I have friends who get paid in KZT, but their mortgage is in dollars… Many shops change their price-lists. In large food supermarkets people were running around with trolleys and sweeping away everything: cereals-butter-pasta, katelka informs [ru].

Megakhuimyak shares his opinion [ru]…:

If our people start living within their means and won't borrow money, then crisis will not be as bad as it seems to be now. Though, only in case if the people already don't have debts in dollars…

… and anaeza recollects the main pride of Kazakh government [ru]:

There is a huge billboard near my office with the President's words on it: “Stability is all the people of Kazakhstan need”. I would say: “No comments”.

However, not all of the bloggers are pessimistic. Dojdlivoe-leto remembers the times of even worse crisis in Kazakhstan in 1990s [ru]:

There were times when all we had to eat were boiled macaroni and convenience soup from the grocery? This time, the worst thing that can happen is that we would have to abstain from shopping. It is not worth of panic.

Hackuna hopes that the new fiscal policy would not only be helpful to the local exporters of raw materials (by the way, their shares on stock markets grew up significantly after devaluation), but also [ru]:

make it possible to involve foreign investors …, since the production costs in the country with devaluated currency can be called at least adequate, if not low.

And a-strekoza suggests having cost-effective parties from now on [ru]:

It is time to declare myself the adept of anti-crisis vodka&pickles parties on a kitchen!

Also posted on neweurasia


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