Energy-rich Kazakhstan dismisses national bank head as currency slumps

Greek Finance Minister Yanis Varoufakis, right, shakes hands with Governor of the National Bank of Kazakhstan Kairat Kelimbetov in Washington, Saturday, April 18, 2015. (File photo: AP)

Energy-rich Kazakhstan sacked its national bank chief Monday as the ex-Soviet Central Asian nation struggles to deal with low oil prices and the impact of Russia’s economic crisis.

The sacking of Kairat Kelimbetov, 46, comes after the bank’s decision to cease propping up the national tenge currency in August, allowing it to shed a third of its value against the dollar in the months since.

“Trust in the bank and the national tenge currency has gone down and we cannot allow this,” President Nursultan Nazarbayev said.

“The country is suffering from a deficit in tenge liquidity and the volume of lending has gone down. These are bad indicators,” Nazarbayev said, putting forward Daniyar Akishev, 39, as the bank’s new governor.

Kazakhstan has seen growth shrink to less than a third of 2013 levels on the back of the steep decline in oil prices and the recession roiling neighbouring Russia.

Last year the national bank devalued the tenge by almost a fifth overnight, citing competitiveness concerns and sparking rare protests in the country’s largest city Almaty.

Septuagenarian autocrat Nazarbayev has been keen to distance himself from the recent economic troubles of a republic he has ruled with virtually no opposition since before independence from the USSR in 1991.

In September he prompted a backlash of irony and irritation on social media after joking Kazakhs could live “without foie gras” and the “hugest Land Cruisers” in a new era of austerity.

The pro-Moscow strongman, who has no clear successor, won a fresh five-year term with nearly 98 percent of the vote in a weakly contested April election.

Last Update: Wednesday, 20 May 2020 KSA 14:12 - GMT 11:12