Kazakhstan central bank to restart base rate operations on Tuesday

    By Mariya Gordeyeva, Dmitry Solovyov and Olzhas Auyezov
    Kazakhstan's central bank said on Monday it would restart money market operations with clear interest rates from Tuesday, setting a base rate of 17 percent after the tenge currency rebounded from record lows.
    The regulator stopped such operations last November when its base rate was 16 percent and let overnight rates soar to more than 500 percent in a bid to reduce pressure on the tenge exchange rate.
    In late December, the central bank of Central Asia's largest oil exporter began providing short-term liquidity to banks on the money market, gradually reducing the overnight rate to low double digits by the end of January.
    Meanwhile, supported by slightly higher oil prices and a mini rally in the Russian rouble, the tenge has rebounded 6.5 percent from an all-time low of 383.91 per dollar hit on January 21.
    The central bank said in a statement on Monday it would provide short-term liquidity at 19 percent and accept short-term deposits at 15 percent, thereby establishing a corridor around its new base rate.
    The weighted average overnight repo rate was 23.41 percent on Monday, when the market closed before the regulator's announcement.
    Bringing interest rates down to a manageable level may help the oil-dependent economy avoid a deep recession, although some analysts say it may already be shrinking, Reuters reports.