Today, on October 15, the national currency of Kazakhstan turned 28. For many years now it’s been a professional holiday for the country’s financiers.
On November 12, 1993, the president’s edict on the national currency was announced. Early morning on November 15, the new currency was adopted across the country and three days after that on November 18 it became the only payment facility in Kazakhstan.
There were several variants of a name for the new currency such as altyn, aksha, tenge and som. Tenge was chosen as it referred to the ancient currency of Central Asia «tanga» which also gave the name for the Russian word «dengi» (money).
Kazakhstan’s authorities started to talk about the new currency and its design publicly in 1992. The first bunch of tenge banknotes was made in the U.K. by Harrison and Sons company. In 1993 out of the public eye, this money was delivered to the country by four IL-76 airplanes. They made 18 flights in total. Ordering banknotes from abroad wasn’t a cheap process(metal coins were produced in Germany), so in 1995 Kazakhstan establish its Banknote Factory.
According to Strategy2050.kz website citing the first head of the National Bank Galym Baynazarov, producing and adopting the new currency was the most demanding challenge for the bank in 1992-1993 and it was urgent. The project required deep changes in the banking system, creation of proper infrastructure of the money market, which at that time didn’t exist in the country that acquired its independence just one year before that. All of these reforms should have been implemented before the adoption of the new currency.
Design of the national currency
There were several Kazakhstani artists, including Timur Suleymenov, Agimsaly Duzelkhanov, Mendybay Alin and Khairulla Gabzhalilov, who worked on the design of the tenge notes. They are authors of the very first designs with portraits of Abay Kunanbayev, Shokan Ualikhanov, Abul Khair Khan and Abylai Khan – prominent individuals in the history of Kazakh people.
The design of the tenge has changed several times throughout its history; it has evolved and become better and better with a high level of protection against falsification. More than once, the tenge was awarded for its outstanding design as the best banknote design globally.
In 2007 a banknote for 10,000 tenge was called the best-designed banknote according to the International Currency Association. In 2011, the International Bank Note Society (IBNS), the organization that annually ranks banknotes from all over the world by their art value and protection level qualified a 10,000 tenge note with a Qazaq Eli monument picture as outstanding. In 2012, a 5,000 tenge banknote design with a snow leopard on it was described by IBNS as the best. One year after that IBNS once again labeled a 1,000 tenge banknote with Kultegin as the best for its outstanding design. Tenge got the award despite mighty opponents such as the new €5 note, $100 note with new protection system and 100 rubles note devoted to XXII Winter Olympics and XI Winter Paralympics Games of 2014 in Sochi.
In 2016, a 20,000 tenge note was called the best regional banknote of 2015 by High Security Printing Europe.
Another achievement of tenge is its symbol that has been recognized throughout the world. On March 27, 2007, Kazakhstan adopted a new sign (₸) for its national currency developed by Vadim Davidenko and SanzharAmerkhanov from Almaty.
Fall of tenge
For 28 years of its existence, the national currency of Kazakhstan has gone through five devaluations. Over the years, the tenge has lost a big part of its value; for example, its exchange rate against the U.S. dollar had changed from 4.60 for one dollar in 1993 to 155 tenge for one USD in 2003. The first devaluation happened in 1998 when tenge lost a third of its value. Back then, the country’s authorities declared the transition to a free rate of exchange that further boosted the devaluation speed. For example, on April 1, 1999, the exchange rate of tenge against the U.S. dollar was 88.46; three days later on April 4, the rate was 113.01 tenge for one dollar.
The second devaluation happened on February 4, 2009, when the National Bank set a corridor of 150± 5 while the national currency lost 23% of its value. On February 4, 2009, the exchange rate was 122.32 tenge per one dollar. On February 5, the rate changed to 143.98 per dollar. All these changes were caused by the global financial crisis, falling real estate market, and low oil prices. On January 21, 2009, Grigori Marchenko replaced Anvar Saidenov at the office of the national bank’s head.
In February 2014, there was the third devaluation with a corridor of 185 ± 3. Back then tenge lost about 20%. For example, while on February 11 the exchange rate was 155.56 tenge per dollar, on February 13 it plunged to 184.5 per dollar.
On August 21, 2015, Kazakhstan went through a fourth devaluation when the country embraced a floating rate. The exchange changed from 188.38 tenge per one U.S. dollar to 255.26 tenge per dollar. The national currency lost 36% of its value that year.
The fifth devaluation happened in March 2020 during the pandemic. Over the period of March 10-11, tenge weakened from 388.07 to 393.6 tenge per dollar due to the higher base rate by the National Bank (12% instead of 9.25%) that also promised to intervene in the foreign currency market. On March 16, 2020, the exchange rate of tenge changed from 405.5 tenge per dollar to 434.6 tenge. A week later tenge depreciated even more to 444.8 tenge per dollar. Starting from March 20, 2020, the national currency in Kazakhstan lost 10% of its value. As of November 15, 2021, the average weighted exchange rate of tenge on KASE is 429.95 tenge per one U.S. dollar.