Monday, July 21, 2014
The Tenge Devalues
When I first arrived in Kazakhstan, the tenge-US dollar exchange rate was about 150 tenge per US dollar. This wasn't too easy to calculate, but eventually I got the hang of it. For well over 4 years, the exchange rate stayed about the same. I've never been in a country where the currency changed a lot, especially quickly, so I didn't think much about it.
Then, this spring, the tenge devalued. Rather quickly. A co-worker brought this up at a meeting – how does this affect our pay? People panicked, although not too much, but mostly we worried and mused; and I wondered, what does this mean?
I get paid in US dollars, so what this meant to me was simply that I was fine, except that it took a while for the tenge to stabilize and for the school's exchange to match the actual market rate. (I can take out money in tenge, using the school's exchange rate. Or I can take out dollars and just go somewhere else to change. Usually, using the school is the best bet.)
Store items didn't change drastically, that I saw. Although I heard of some stores closing simply to change prices. And some people panicked and went out and bought a lot. I think that more expensive items changed quickly.
Mostly, I've noticed that items have changed over time. Every now and then I see the price of an item and think, “Wow! That's expensive!” and then realize that since the rate has changed, it doesn't really affect me – the price in dollars is the same.
A co-worker pointed out that this change in value does affect locals, so I quickly gave my cleaning lady a “raise”--she still makes the same amount as she did earlier (dollar-wise), but gets more in tenge.
When the USSR collapsed, the local currency was the rouble, and inflation was extreme. When the tenge was introduced, once again there was extreme inflation. The tenge was introduced at 5 tenge per dollar, but quickly rose to about 70 tenge per dollar. Most people here over 30 remember those times and, well, have reason to panic when suddenly their currency's value changes again.
More recently, I have learned, is that the currency devalued about 5 years ago, right before I moved here. A similar sort of mild panic ensued, but luckily it stablized soon after. My Kazakh friend works as a translator for mostly international companies, and thus has a lot of her money in Euroes, pounds, and US dollars. She says she wasn't affected much by either of the recent currency devaluations, and is quite happy to have her money in foreign currency! I know I'm lucky too.
So... not a super-extreme drop in value, but enough to worry quite a few people and change some prices. Hopefully the tenge will remain stable for at least the next 5 years.