Kazakh president names aide as c.bank head after currency falls
ASTANA, Nov 2 (Reuters) - Kazakhstan's president appointed his aide, Daniyar Akishev, as central bank chairman on Monday, telling him to rebuild trust in the national tenge currency which has lost a third of its value against the dollar in less than three months.
The reshuffle, quickly approved by the Senate upper chamber, replaced Kairat Kelimbetov, who was only in the job for two years.
The tenge started sliding after the central bank abandoned its pegged exchange rate policy on Aug. 20 - a response to the sharp drop in the price of oil, Kazakhstan's main export, and devaluations carried out by the Central Asian state's major trading partners Russia and China.
Under Kelimbetov's watch, the central bank resumed interventions on the foreign exchange market in mid-September and has since spent at least $1.7 billion on protecting the tenge from what it described as overshooting driven by speculation.
"The (public) confidence in the central bank and the national currency, the tenge, has fallen and this is not acceptable," President Nursultan Nazarbayevsaid in a written address to the Senate.
"There is a deficit of tenge liquidity in the country and lending to the economy is falling. These are bad indicators and they need to be addressed."
The regulator now faces a policy dilemma as supporting the tenge restricts liquidity, while economic slowdown calls for a looser monetary policy.
New chairman Akishev, 39, worked at the central bank for 18 years before joining Nazarbayev's administration in 2014, where he oversaw economic matters. He was deputy central bank chairman in 2008-2009, at the time of the previous major financial crisis which was triggered by the U.S. mortgage meltdown.
Akishev, who was present at the senate during the vote, declined to comment on his appointment when approached by reporters. Some market players doubted his arrival would bring a significant policy shift.
"Not sure that this will produce a huge impact - ultimately most big economic policy decisions, including at the central bank, are run by the president anyway," Nomura analyst Timothy Ash said in a note.
"True, the former governor probably took the rap for being perceived as not seeing the writing on the wall earlier enough for letting the tenge weaken sooner, rather than later, and in seeing the resultant loss in foreign exchange reserves," he added. (Reporting by Raushan Nurshayeva; Writing by Olzhas Auyezov; Editing by Clarence Fernandez and Andrew Heavens)
