ALMATY – Kazakhstan’s central bank hiked its policy rate to 13.5% from 10.25% on Thursday as the central Asian nation’s tenge currency sank alongside the Russian rouble after Moscow launched attacks on Ukraine.
The tenge plunged more than 6% on Thursday on the news. Earlier this week, the central bank had to intervene in the market to support the currency although it was under much less pressure.
The rouble hit all-time lows against the dollar and the euro on Thursday in anticipation of tough Western sanctions against Moscow.
Russia is one of Kazakhstan’s main trading partners and the former Soviet republic is a member of Russia-led economic and military blocs. Kazakhstan has stopped short, however, of recognising the independence of Russian-backed separatist republics in Ukraine’s east this week when Moscow did so.
(Reporting by Mariya Gordeyeva; Writing by Olzhas Auyezov; Editing by Clarence Fernandez and Kim Coghill)