The Kazakhstan Tenge (KZT): Overview, History, and Economic Impact

The Kazakhstan tenge (KZT) stands as the official currency of Kazakhstan, marking the nation’s monetary independence since its introduction in 1993. Prior to this, Kazakhstan, a former member of the Soviet Union, utilized the Russian ruble as its currency. With the dissolution of the Soviet Union in 1991, Kazakhstan embarked on its path of sovereignty, leading to the establishment of its own national currency, the tenge.

Kazakhstan, situated in Central Asia, boasts a population of approximately 19 million inhabitants. Spanning vast territories bordered by Russia, China, Kyrgyzstan, Uzbekistan, and Turkmenistan, Kazakhstan ranks as the ninth largest country globally in terms of landmass. Following its independence, Kazakhstan transitioned into a republic with a parliamentary system, with Kazakh and Russian serving as its official languages.

The KZT operates with 100 subunits, known as tiyn, with coins issued in denominations of 2, 5, 10, 20, and 50 tiyn, alongside 1, 2, 3, 5, 10, 20, 50, 100, and 200 tenge. Banknotes, ranging from 200 to 20,000 tenge, circulate within the economy. While previously produced abroad, the coins and banknotes are now manufactured domestically under the supervision of the National Bank of Kazakhstan.

Kazakhstan commemorates the adoption of its national currency annually on November 15th, observed as the Day of the National Currency of the Republic of Kazakhstan.

Kazakhstan’s economy relies heavily on its vast reservoirs of natural resources. Notably, in 1993, efforts commenced to exploit the substantial natural gas deposits within the region. Collaborating with the Chevron Corporation (CVX), Kazakhstan embarked on tapping into the Tengiz oil field, among the world’s largest. Subsequently, endeavors to construct an extensive network of pipelines to facilitate the exportation of oil and gas from these fields were initiated.

Since 2009, the KZT has experienced a significant depreciation vis-à-vis the U.S. dollar (USD) in international currency markets. With the value of 1 KZT declining from approximately $0.0083 USD in January 2009 to $0.0022 USD as of May 2023, marking a depreciation exceeding 70%.

The Kazakhstan tenge was introduced in 1993, replacing the Russian ruble as the nation’s official currency following its independence from the Soviet Union in 1991.

The value of the Kazakhstan tenge is influenced by various factors including economic performance, monetary policies, and global market dynamics, particularly concerning natural resource prices.

The Kazakhstan tenge is divided into 100 tiyn and circulated in denominations ranging from 1 to 20,000 tenge, encompassing both coins and banknotes.

Kazakhstan’s economy is primarily driven by its natural resource exports, particularly oil and gas. However, the nation has been making efforts to diversify its economy, focusing on sectors such as agriculture, manufacturing, and technology to reduce dependency on commodities.

Geopolitical stability plays a crucial role in shaping investor confidence and, consequently, the performance of the Kazakhstan tenge. Any political unrest or instability in the region can lead to fluctuations in the currency’s value.