The Kazakh banking sector is emerging from its crisis and
institutions financial indicators are set to improve,
Grigory Marchenko, Governor of the National Bank of Kazakhstan
said this weekend.
In an interview with Emerging Markets, Marchenko
also mounted a robust defence of the decision last year to
devalue the tenge.
With the restructuring of the bankrupt Alliance Bank
complete, and that of Bank Turan Alem well underway, Marchenko
argued that the measures taken since he returned to the
national bank in February last year have largely restored
peoples faith in banking regulation and management.
One hundred per cent credibility is never possible,
but the central bank does enjoy the faith of our own population
and of the financial community in general, he said.
Marchenko predicted that forthcoming financial
indicators for the sector are likely to show a distinct
improvement versus last year. If the data for the first
half of the year are good, that will prove we are on the right
Marchenko was reappointed in February last year to the job
he held in 1999-2004, and oversaw an 18% devaluation of the
tenge days afterwards. He is openly dismissive of those
observers who claimed that the adjustment was too little, too
In January 2009 there was a massive flight out of the
currency, says Marchenko, adding that in recent months
the central bank has had to intervene forcefully to avoid any
overappreciation of the Kazakh tenge.
There was an overly emotional reaction to the
devaluation. When things change dramatically there are always
people looking for someone to blame.
He says that the fact that the tenge quickly stabilized
around the envisaged Kzt150/$ mark, made a nonsense of claims
that the devaluation would rapidly be followed by another one.
I follow the Dilbert principle that most people when they
act outside the sphere of their professional responsibilities
act like idiots.
Marchenko adds that while many commentators felt free to
make statements about the devaluation, none of them bore any
responsibility for them. They dont run the National
Bank of Kazakhstan. I do.
Marchenko is enough of a realist however to accept that his
high profile position as a central bank governor inevitably
attracts its share of criticism, fair or otherwise.
Its part and parcel of the job description to be
Furthermore its not that he takes much notice of the
barbs aimed at him in the press. The media thrives on
controversy and negative criticism, he claims, adding:
Being the central bank governor is not about being
popular with the tabloid press.
Moreover, the overwhelming majority of expert opinion was
fully aligned with the timing and scale of the devaluation.
Some 99% of people who know anything about economics
supported the devaluation we undertook.
Marchenko is equally dismissive of criticisms of the
punitive actions he took against those foreign exchange bureaus
in Kazakhstan which conspired to spread rumours about a further
possible devaluation of the tenge.
Those foreign exchange bureaus which misbehaved were
punished, those which didnt were allowed to continue to
operate. He adds that there was never any intention to
limit free and fair competition on the foreign exchange
We dont generally want to be prohibitive in our
actions, we want there to be healthy competition between the
banks, the foreign exchange bureaus and the post office in