GOVERNMENT: Kazakhstan to assume preventive measures to ensure balanced budget and monetary policy
"Amid negative changes in the global economy, the Government and the National Bank have made a decision to implement new economic policy. Introduced on August 20, 2015, it is based on the regime of inflation targeting and freely floating exchange rate of tenge," Prime Minister of Kazakhstan Karim Massimov announced during a conference call on Thursday. In the light of introduction of the new policy, Premier Massimov tasked akims (governors) of the regions to keep the food prices down countrywide. Later in the day members of the Cabinet attended a special press conference at the Central Communications Service to talk about why Kazakhstan had made much-needed shift. In particular, Karim Massimov noted that due to lower oil prices Kazakhstani will have to get used to living ‘in another economic reality'. According to him, the Government will pursue relevant economic policy taking into account Canada and Australia's experience. He added that the Government has no intention to use money from the National Fund, because the situation may get worse. Mr. Massimov also stressed that in the immediate future Kazakhstani producers will have to work hard to make their products more competitive. At the press conference utmost attention was paid to measures called to prevent fall of living standards in Kazakhstan. Thus, First Deputy Prime Minister Bakytzhan Sagintayev vowed that the Government will subsidize the reduced working hours of skilled workers. This, in his words, is outlined in the amendments made to the Employment Roadmap 2020 program. As part of the program skilled workers will be offered grants to take additional training or career development courses. The same day Head of State Nursultan Nazarbayev gathered Kazakhstani entrepreneurs in the Akorda's presidential residence to discuss the situation. At the meeting, President Nazarbayev stressed that Kazakhstan had no alternative other than to introduce a freely floating rate of tenge. "In all honesty, it was a least-evil solution. We had no alternative. We could do nothing, keep the currency corridor and wait until the situation gets better. We also could allow gradual devaluation of the national currency. However, after careful consideration and much thought we have decided to introduce free floating exchange rate of tenge and shift to inflation targeting," the President said. The Kazakh leader also emphasized that the Government will assume preventive measures in order to ensure balanced budget and monetary policy and counteract global challenges to sustain economic growth.