5 Tenge – Kazakhstan

In 2013, Kazakhstan's currency, the tenge, was operating under a managed exchange rate regime, pegged to a dollar-dominated basket. This policy, maintained by the National Bank of Kazakhstan (NBK) since 2011, provided a crucial anchor of stability following the global financial crisis and the sharp tenge devaluation of 2009. The primary objectives were to control inflation, which had spiked in previous years, and to foster predictability for businesses and foreign investment. Throughout the year, the tenge traded in a tight band around 150 KZT to the US dollar, a rate seen as artificially strong by many exporters who argued it hurt their competitiveness.

However, this stability came under growing pressure. The external economic environment was shifting, with a key factor being the monetary policy of the US Federal Reserve signaling a "taper" of quantitative easing, which strengthened the US dollar globally. Concurrently, Kazakhstan's major trading partner, Russia, was experiencing a weakening ruble, and the price of Kazakhstan's key export, oil, began to show volatility. These factors widened the current account deficit and increased the cost of maintaining the peg, leading to significant foreign exchange reserve depletion as the NBK intervened to defend the tenge's corridor.

By the end of 2013, the currency situation was one of mounting tension and unsustainable equilibrium. While the official policy remained unchanged, market consensus grew that the tenge was overvalued. Economists and investors increasingly debated not if, but when the NBK would be forced to abandon its costly defense and transition to a more flexible exchange rate. This set the stage for the pivotal policy shift that would occur in February 2014, when Kazakhstan unexpectedly moved to a free float, leading to an immediate and significant devaluation of the tenge.