Abandoning the tenge? Kazakh investors are increasingly turning to the dollar.

In November 2023, the share of foreign currency deposits in the total volume of deposits in Kazakhstan increased by 1.7 percentage points, reaching 23%. Such a sharp rise was last observed in June 2022, reports IA "NewTimes.kz".

According to the National Bank, referenced by specialists from the First Credit Bureau, dollarization in the segment of legal entities was higher than that of individuals. The share of foreign currency deposits among companies rose by 2.3 percentage points to 26.5%, while for private depositors, the increase was 1.2 percentage points, reaching 20.3%.

The overall trend towards increased dollarization, according to analysts, is linked to several factors:

• Growth of foreign currency deposits: the volume of deposits in foreign currency increased by 10%, reaching 8.9 trillion tenge.
• Decline of tenge deposits: deposits in the national currency decreased by 0.4% to 29.7 trillion tenge.

Also read: The dollar is collapsing the tenge: what should Kazakhstanis do?

A key role in this was played by currency revaluation. When measuring the growth of foreign currency deposits in dollars, it was only 5% ($17.4 billion compared to $16.5 billion). This is associated with the depreciation of the tenge: in November, the national currency lost 4.7% of its value against the dollar – one of the most noticeable declines in recent years.

The situation in November 2023 resembles the events of June 2022. At that time, the tenge also exhibited significant depreciation, which stimulated active growth in foreign currency deposits.