Analyst sees KZT weakening to 460-495 per USD by Q4 2026
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Finam analyst Alexander Potavin forecasts the Kazakh tenge to gradually weaken against the US dollar in the coming months, with the USD/KZT rate potentially reaching 460-495 by the fourth quarter of 2026. The projected decline is attributed to reduced currency support measures and global oil market dynamics, even as rising crude prices and foreign investor demand for Kazakh bonds currently support the tenge.
Current Exchange Rate and Oil Support
On July 21, the dollar traded around 468 tenge, near the average of the past two weeks. Rising Brent crude prices, which reached about $91 per barrel in mid-July — 26% higher than late June — have helped support the tenge. The increase follows heightened Middle East tensions, including US-Iran missile exchanges that disrupted oil traffic. Additionally, foreign investor interest in Kazakh government bonds creates demand for the tenge as investors convert currency to purchase them.
Medium-Term Pressures
Potavin warns that medium-term pressure on the tenge may intensify due to the phasing out of currency support mechanisms. These include the cancellation of the mandatory 50% foreign currency sale requirement for quasi-state companies and planned reductions in transfers from the National Fund to strengthen budget discipline. The analyst believes these changes could reduce the supply of foreign currency on the market.
Caspian Pipeline Consortium Disruptions
Negative news surrounding the Caspian Pipeline Consortium (CPC) has added uncertainty. Drone attacks on oil tankers near the CPC marine terminal temporarily halted loading — the fifth such attack on consortium facilities. However, the impact has been offset by rising oil prices, with Brent crude trading around $90-91 per barrel in late July.
What's Next
The National Bank of Kazakhstan is set to announce its next monetary policy decision on August 15, which may influence the tenge's trajectory. It remains unclear whether the current oil price rally and investor inflows can fully offset the structural risks from reduced currency support.
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Analyst sees KZT weakening to 460-495 per USD by Q4 2026
