Macroeconomic Forecast Kazakhstan

Despite recent rumors of a further devaluation of the Kazakh tenge by end-2009, we believe that the National Bank of Kazakhstan will continue to keep the unit close to its current KZT150.00/US$ trading level. Indeed, given the stabilization of the Russian rouble following its precipitous decline earlier in the year, combined with the rally in global oil prices in recent months, we believe that devaluation pressures have eased considerably. However, we do expect the central bank to weaken the currency in 2010 in a bid to improve the competitiveness of its exports and exploit the global economic recovery. As such, we target a move to KZT175.00/US$ by end-2010.

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