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To: IngotWeTrust who wrote (31162)	4/4/1999 5:52:00 PM
From: Alex	Respond to of 116764

4/04/99 - Kazak state will no longer try to support national currency <Picture> ALMATY, Kazakstan, Apr 04, 1999 (AP Worldstream via COMTEX) -- Signaling local economic damage from Russia"s economic crisis, the prime minister and Central Bank chief of Kazakstan announced Sunday that the state would no longer try to support the national currency. The Central Bank has been spending its foreign reserves to try to prop up the currency, the tenge. Over the last six months, the tenge has traded fairly steadily at about 88 to the U.S. dollar. However, Prime Minister Nurlan Balgenbayev and Central Bank chairman Kadyrzhan Damitov said in a prime-time statement over national television Sunday evening that the Central Asian country could no longer afford to keep the tenge stable and that it would now be allowed to float freely. ""Kazakhstan"s economy has started to decline, unemployment has increased and factories are being shut down. Trade turnover has been cut by dlrs 1 billion,"" Balgenbayev said. ""That"s why we are making this responsible statement, being aware of (the impact of) our action and hoping to ... increase our gold and currency reserves."" The prime minister said that only supply and demand would determine the dollar rate in Kazakstan, a former Soviet republic. He vowed that the country would pay its debts and that the government would compensate private depositors for their bank accounts, if they are frozen for nine months or more. ""We will not allow any defaults on internal and external obligations of the state,"" Balgenbayev said. Kazakstan"s economy remained fairly stable in the months following the August financial crisis that swept Russia, its northern neighbor and largest trade partner. Some 40 percent of Kazakstan"s trade is with Russia. But the country"s economy has nonetheless declined. More than 7 million of the country"s 16 million people live in poverty, and unemployment is widespread. Increasing numbers of enterprises are going bankrupt. The International Monetary Fund estimated in January that the global and Russian financial crises had caused Kazakstan losses equal to at least 5 percent of its gross domestic product. Not only those crises are to blame, however. Kazakstan is heavily dependent on the sale of oil for much of its state revenue. With world oil prices low, the government has already had to revise budget projections for 1999, and in February, President Nursultan Nazarbayev ordered the government to slash its expenses. Copyright 1999 Associated Press, All rights reserved.