After strengthening during the spring, the tenge averaged 469.2 per US dollar in May. This is an important new starting point for the market. From here, Kazakhstan enters the summer period, which has historically been associated with moderate seasonal pressure on the tenge as demand for foreign currency rises among both households and businesses. The holiday season plays a role as well: more people travel abroad, which means more conversion into foreign currencies.
Another important factor is the regulator’s recent decision. On June 5, 2026, the National Bank reduced the base rate by 100 basis points, from 18.0% to 17.0%. This monetary easing should not be viewed as a trigger for an immediate outflow of foreign investors. Interest rates remain high and continue to support the attractiveness of tenge-denominated assets. While relative returns have become slightly lower, Kazakhstan still offers a competitive environment for investors seeking carry opportunities and risk premiums.
At the same time, May’s average exchange rate was relatively close to the baseline forecast, with a deviation of 5.4 tenge, or 1.2%. The main reason for this difference was a double external shock: falling Brent oil prices combined with a stronger US dollar globally. Together, these developments created a less favorable environment for emerging market currencies.
Forecast results: summer outlook and scenario range
As of June 8, the estimated average exchange rate stands at 488.1 tenge per US dollar.
Expected monthly averages for June, July, and August are as follows:
Optimistic scenario:
- 471.0 / 490.8 / 499.0 tenge per US dollar
Baseline scenario:
- 488.5 / 508.2 / 516.5 tenge per US dollar
Pessimistic scenario:
- 506.0 / 525.7 / 534.0 tenge per US dollar
The economic logic behind these scenarios is straightforward. The baseline scenario assumes a gradual return to a weaker tenge during the summer months. The optimistic scenario reflects a more favorable external environment and a softer adjustment path. The pessimistic scenario assumes faster depreciation driven by weaker global conditions and/or stronger domestic demand for foreign currency.
Over the monthly horizon, the key mechanism remains the same: external conditions -> currency flows -> balance between supply and demand.
High oil prices can provide structural support through export revenues and additional foreign currency inflows. However, summer months often bring seasonal shifts in demand:
1. Holiday factor: More international travel increases retail demand for foreign currency.
2. Commercial payments: Imports and corporate settlements become more visible market drivers when there is no strong seasonal tax-related support for the tenge.
3. Monetary easing: The reduction of the policy rate to 17.0% slightly lowers the attractiveness of tenge yields, although rates remain high enough to continue acting as an anchor against sharp market swings.
As a result, the most likely path remains one where May represents a relatively strong level for the tenge, followed by gradual weakening during the summer. This view is reflected in the baseline scenario.
According to the updated forecast profile, the baseline scenario suggests that exchange rates will remain elevated after the summer and throughout the autumn months before partially stabilizing by year-end at around 527.6 tenge per US dollar.
In other words, the baseline outlook points to a prolonged period of a weaker tenge compared to May. However, the range of possible outcomes remains wide. The decisive factors will be Brent oil prices and the global strength of the US dollar.
It is important to emphasize that these scenario boundaries are not guaranteed outcomes. They represent statistically grounded ranges of possible trajectories based on the patterns observed in the data.
Forecast methodology: stationary data series and a four-model consensus
The forecast is built on an approach designed to ensure statistical consistency and comparability over time.
- Monthly USD/KZT exchange rate data from January 2011 to the present were used.
- Models were estimated using stationary time series, meaning the data were transformed so that their key statistical properties remain stable over time.
- The final forecast is based on a consensus of several independent econometric models.
This approach improves forecast stability because different model types react differently to outliers, structural shifts, and short-term shocks. Combining their results reduces the risk of relying too heavily on a single model’s potential error.
Historical forecast accuracy
For 2026, the average relative forecast error was 0.6%, while the average absolute error was 2.8 tenge.
In May 2026, the deviation from the baseline scenario was:
- 1.2% in relative terms
- 5.4 tenge in absolute terms
May confirmed a stronger tenge environment, but the updated forecast for June through August points to seasonal weakening and a return to higher average exchange rate levels.
The reduction of the base rate to 17.0% does not by itself imply a significant withdrawal of foreign investors. However, it does make domestic financial conditions slightly less restrictive. At the same time, the summer season typically increases demand for foreign currency, including through holiday-related spending.
The baseline scenario therefore suggests that the tenge will remain relatively weaker than its May levels through the remainder of 2026. The exchange rate is expected to reach its highest levels during the autumn months before gradually stabilizing toward December.
Disclaimer: This material is provided for analytical and informational purposes only and should not be considered investment advice. Exchange rates are sensitive to news, external shocks, and changes in market behavior. Actual outcomes may differ from the scenarios presented above.
National Bureau of Economic Research specifically for EconomyKZ.org
