This 2012 Article IV Consultation reports that fiscal and monetary policies have adapted to the economic recovery in the Republic of Kazakhstan. The authorities have appropriately responded to the upswing in the cycle by gradually tightening fiscal policy and sterilizing excess bank liquidity. Directors have commended the authorities’ policies that, together with high commodity prices, yielded a strong economic recovery. Directors have also appreciated the preparation of plans to deal with a possible protracted global slowdown and a decline in oil prices.


This 2012 Article IV Consultation reports that fiscal and monetary policies have adapted to the economic recovery in the Republic of Kazakhstan. The authorities have appropriately responded to the upswing in the cycle by gradually tightening fiscal policy and sterilizing excess bank liquidity. Directors have commended the authorities’ policies that, together with high commodity prices, yielded a strong economic recovery. Directors have also appreciated the preparation of plans to deal with a possible protracted global slowdown and a decline in oil prices.

Annex I. Relations With the Fund

(As of May 1, 2012)

Membership Status

Joined: 07/15/92; Accepted Article VIII, Sections 2, 3, and 4 in 1996 and maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions. The de jure exchange rate arrangement is a managed float, while the de facto arrangement is classified as crawl-like.

General Resources Account

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SDR Department

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Outstanding Purchases and Loans


Latest Financial Arrangements

In millions of SDR

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Projected Payments to Fund


Safeguards Assessments

Not applicable to the National Bank of Kazakhstan (NBK) at this time.

Exchange Rate Arrangements

The currency of Kazakhstan is the tenge, which was introduced in November 1993. The official exchange rate is determined on the basis of foreign exchange auctions that are held daily. Auctions are held for U.S. dollars, euros, and Russian rubles, and official rates are quoted for over 30 other currencies on the basis of cross-rates. From late 1999 to October 2007, the exchange rate regime was a managed float with no preannounced path. From October 2007 the tenge was maintained within a narrow range against the U.S. dollar. In February 2009 the tenge was devalued by 18 percent against the US dollar, and a trading band of T150/US$ +/− 3 percent was established. In February 2010, the trading band was widened and set at an asymmetric T150/US$ +10/−15 percent. In February 2011, the trading band was officially abolished, and the de jure exchange rate arrangement was changed from a pegged exchange rate within horizontal bands to a managed float. The de facto exchange rate arrangement is classified as crawl-like, because the tenge has been consistently tracking a trend against the U.S. dollar within a 2 percent margin. The exchange rates at numerous exchange bureaus are very close to the auction rate, and the spread between buying and selling rates is very small. The exchange system is free from restrictions on payments and transfers for current international transactions.

Article IV Consultation

Kazakhstan is on the standard 12-month consultation cycle, in accordance with the Decision on Article IV Consultation Cycles (Decision No. 14747-(10/96) (9/28/2010). The last consultation was concluded on June 16, 2011 (see IMF Country Reports No. 11/150 and 11/151).

FSAP Participation and ROSCS

Kazakhstan participated in the Financial Sector Assessment Program (FSAP) in 2000. The staff report on the Financial Sector Stability Assessment (FSSA) was issued on November 27, 2000 (FO/DIS/00/142). The FSSA included the following ROSC modules: Basel Core Principles for Effective Banking Supervision, Core Principles for Systemically Important Payment Systems, Code of Good Practices on Transparency in Monetary and Financial Policies, IOSCO Objectives and Principles of Securities Regulation, and IAIS Insurance Core Principles. An FSAP Update mission took place in February 2004 and a second FSAP Update mission took place in March 2008. The fiscal transparency module was completed in October 2002 and the final report published in April 2003. A data module mission took place in April/May 2002, and its final report was published in March 2003. An update of the data ROSC was undertaken in 2006 and the report was published in February 2008 (Annex V).

AML/CFT Assessment

Kazakhstan’s anti-money laundering and combating the financing of terrorism (AML/CFT) framework was recently assessed against the AML/CFT standard, the Financial Action Task Force (FATF) 40+9 Recommendations. The evaluation was conducted by the Eurasian Group on money laundering and financing of terrorism (EAG), the FATF-style regional body of which Kazakhstan is a member, and the final mutual evaluation report was adopted in June 2011. The report indicates that the main sources of criminal proceeds in Kazakhstan are crimes related to fraud and abuse of public office. The evaluators found that Kazakhstan had a relatively comprehensive AML/CFT framework in place, but that significant deficiencies nevertheless remained, notably with respect to customer due diligence measures and the reporting of suspicious transactions.

Technical Assistance

Kazakhstan has received technical assistance and training by the Fund in virtually every area of economic policy, including through about 90 technical assistance missions provided during 1993–2012 by FAD, LEG, MCM, STA, and the IMF Institute. In addition to short-term missions, the Fund has provided resident advisors to the National Bank of Kazakhstan, to the Agency of Statistics of the Republic of Kazakhstan, to the Ministry of Finance, and a peripatetic expert to the Financial Supervision Agency. Other international agencies and governments, including the World Bank, EU TACIS, EBRD, UNDP, and OECD, also are providing a wide variety of technical assistance. The following list summarizes the technical assistance provided by the Fund to Kazakhstan since 2003.

Monetary and Capital Markets Department

Technical assistance has enabled steady progress in a number of areas related to monetary and exchange affairs, including banking legislation, central bank accounting, payments system reform, central bank organization and management, foreign operations and reserve management, banking supervision, monetary statistics, currency issuance, monetary operations, and money-market development.

  • 1. September 2004: Bringing banking prudential regulation up to EU standards.

  • 2. September 2004: Implementing inflation targeting: next steps.

  • 3. November 2007: Strengthening banking supervision and risk assessment.

  • 4. 2009–12: Developing banking sector stress testing. The initial mission in January 2009 was followed up by a number of visits by a peripatetic expert to the FSA over the course of 2009–12.

  • 5. November 2010: Reducing nonperforming loans in the banking system (joint with LEG).

Fiscal Affairs Department

The Fiscal Affairs Department has given advice to Kazakhstan in the areas of tax and expenditure administration, the establishment of a treasury system, and the introduction of a social safety net.

  • 1. April 2003: Customs administration

  • 2. September 2004: Treasury reform process

  • 3. September 2011: Public financial management

  • 4. October 2011: Accounting reform and IT system functionality


The Fund’s technical assistance program in statistics has focused on the development of the institutional framework appropriate to the needs of a market economy. The assistance has concentrated on establishing procedures for collecting and compiling monetary, government finance, balance of payments (including external trade), and national accounts.

  • 1. January 2006: Real sector and balance of payments statistics.

  • 2. August 2006: Real sector statistics.

  • 3. December 2006: ROSC Update mission (and DQAF).

  • 4. April 2008: GFSM 2001 implementation.

  • 5. January 2009: Monetary statistics

  • 6. April 2011: BOP statistics.

Legal Department

  • 1. April 2008: Reforms to tax law

  • 2. April 2010: Anti-money laundering and combating the financing of terrorism (jointly with the World Bank and United Nations Office on Drugs and Crime).

  • 3. November 2010: Reducing nonperforming loans in the banking system (joint with MCM).

  • 4. July 2011: Bankruptcy legislation

IMF Institute

Kazakhstani officials have participated in courses in Washington and at the Vienna Institute in the areas of macroeconomic management, expenditure control, financial programming, taxation, statistics, and others. In addition, the IMF Institute has conducted courses in the region. Seminars and training sessions have also been conducted by MCM and STA technical assistance missions.

Resident Representative

The position was terminated in August 2003, but the Fund maintains a local office in Almaty.

Annex II. Relations With the World Bank

(As of May 1, 2012)

Kazakhstan became a member of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) in July 1992 and a member of the International Finance Corporation (IFC) in September 1993. In 2010 Kazakhstan became an IDA donor under the IDA 16 replenishment. Kazakhstan is the largest client of the IFC in Central Asia.

IBRD in Kazakhstan

The Bank’s lending operations in Kazakhstan are wide-ranging and all fall within the key pillars of the Country Partnership Strategy (CPS) adopted in 2004. The new CPS for 2012–17 was presented to the Board of Directors on May 1, 2012. As of April 2012, the IBRD loan program comprises twelve projects with a total commitment of $2.55 billion, of which $887 million has been disbursed. Among the twelve projects, implementation of two projects (agricultural competitiveness and Moinak electricity transmission) will be completed by the end of this calendar year. The other ten active projects are: forest protection and reforestation, Ust-Kamenogorsk environmental remediation, technology commercialization, customs development, tax administration reform, health sector technology transfer and institutional reform, technical and vocational education modernization, strengthening the national statistical system, South West roads, and Alma electricity transmission. A new road project to complete construction of the last section of the Western Europe-Western China corridor linking Almaty to the border with China was presented to the Board of Directors on May 1, 2012.

The Joint Economic Research Program (JERP) provides extensive analytical support to the Government’s development needs. Analytical and advisory services (AAA) under the JERP remain in high demand and currently comprise 21 activities amounting to $4.4 million. As in previous years, the current JERP is focused on the government’s strategic priorities in: (i) enhancing competitiveness; (ii) mitigating macroeconomic risks; (iii) strengthening public finance management and administration; and (iv) improving human development.

IFC in Kazakhstan

Kazakhstan is the IFC’s largest client in Central Asia. As of the end of March 2012, IFC’s total committed portfolio in Kazakhstan amounted to $345 million, of which $336 million has been disbursed. IFC’s efforts in Kazakhstan are directed to foster private sector led growth, particularly in the non-extractive sectors and frontier regions. The investment portfolio is mostly concentrated in the financial sector and general manufacturing, although recently IFC has begun making investments in the agribusiness sector. In the financial sector, IFC is focusing on: (i) further stabilization, diversification, and extension of the maturity of the banks’ funding base; and (ii) establishment of the best international corporate governance and regulatory environment. As a result of the financial sector crisis, the IFC has aimed to identify partner financial institutions to contribute to the stabilization of the financial sector and increase access to finance in priority sectors. In this regard, over the past three and a half years, the IFC has provided close to $600 million in equity, quasi-equity, senior debt, and trade finance to several banks.

IFC’s investment program has been expanding in recent years. Investments grew tenfold between FY05 and FY08 (to $110 million) and nearly doubled again in FY09. In FY10, IFC invested a record $336 million in five projects in the financial and agribusiness sectors, with vast majority provided to commercial banks. Post-crisis investment levels have been more modest, with $103 million invested in five projects in FY11 and $66 million invested in FY12 to date.

In addition, the IFC is providing advisory services in several key areas. These include Corporate Governance and Private Public Partnerships (PPPs), where IFC’s Transaction Advisory team is in discussions to help the government structure PPPs in the roads and health sectors. A new advisory investment climate initiative has been launched to assist Central Asian countries, including Kazakhstan, in strengthening transparency of tax systems.

Annex III. Relations With the European Bank for Reconstruction and Development

(As of May 1, 2012)

The European Bank for Reconstruction and Development (EBRD) is the largest investor outside the oil and gas sector in Kazakhstan. As of May 1, 2012, the EBRD’s total business volume in Kazakhstan, including co-financing, stood at €11 billion, with investments totaling €4.4 billion (both these figures include approximately €2.4 billion in cumulative Trade Facilitation Program turnover). As of May 1, 2012, the EBRD’s portfolio in Kazakhstan amounted to €1.8 billion. During 2011, the EBRD signed 14 projects, including regional ones, for a total amount of EBRD finance about €300 million. During the first four months of 2012, the EBRD signed six operations with a total annual business volume (ABV) of €93 million.

In its country strategy, approved in 2010, the EBRD aims to assist Kazakhstan in promoting economic diversification and moving towards a more sustainable model of financial development. The EBRD’s main operational objectives for 2012 are:

  • In the corporate sector, support investment in the manufacturing and the agribusiness sectors to address immediate financing needs, while promoting the modernization and diversification of the economy, best business and environmental practices, and energy efficiency.

  • In the financial sector, work with the Kazakhstani authorities and other IFIs to strengthen the country’s financial sector; re-engage with partner banks; expand the partner banks group; and assist the authorities with resolving the banks’ NPL problem and identifying and implementing policy reforms to promote de-dollarization, develop local capital markets, and increase the availability of sustainable local currency financing.

  • In the infrastructure sector, restructure the national railway company and support its energy-efficiency improvement program; improve the infrastructure in Kazakh municipalities; expand activities into the solid waste and district heating sectors and support municipal sector reform, including innovative methods for developing and financing projects in the water segment.

  • In the power and energy sector, support clean energy through the provision of financing to modern generating facilities, stemming losses in the distribution segment through rehabilitation of power lines and developing pilot renewable energy projects with private operators (subject to bankability and integrity).

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Note: * Including € 2.4 billion in cumulative Trade Facilitation Program lines

Annex IV. Relations With the Asian Development Bank

(As of April 19, 2012)

Kazakhstan became a member of the Asian Development Bank (ADB) in 1994. In the early years of transition from a centrally planned to a more market-driven economy, ADB focused on efforts to sustain a higher growth rate, promote environmental friendly development, support the private sector, and encourage regional integration.

As of April 19, 2012, cumulative public sector loan commitments to Kazakhstan amounted to $2.34 billion, of which about $1.39 billion has been disbursed. Commitments cover 20 public sector loans in agriculture and natural resources, education, finance, transport and communications, water supply and sanitation, and irrigation. The loan operations were complemented with 65 technical assistance (TA) projects totaling over $28 million. Kazakhstan is no longer eligible for concessional resources from the ADB’s Asian Development Fund.

In recent years, ADB operations focused on water distribution and irrigation, road transportation, budget support, private sector, and small and medium enterprises (SMEs). In supporting the State Drinking Water Sector Program, 2002–15, ADB provided a $35 million loan in 2004 for basic water supply services and a capacity-building program to improve living/health conditions in Akmola and North and South Kazakhstan. After a slight pause from 2004, ADB’s public sector operations in Kazakhstan resumed in 2008 with the signing of the $225 million loan agreement for the Central Asia Regional Economic Cooperation Program (CAREC) Transport Corridor 1 project under a $700 million Multi-tranche Financing Facility (MFF). The Transport Corridor project aims to improve a major transport corridor across Kazakhstan, linking it with its eastern and western neighbors, as well as opening up north-south routes.

In 2009, ADB supported Kazakhstan in mitigating the impact of the global financial/economic crisis with a $500 million loan. The loan supported the government’s crisis-mitigation action plan and the employment-generation program and helped Kazakhstan finance its budget deficit. ADB also approved another loan totaling $187 million under the MFF for reconstruction of CAREC Transport Corridor 1 (Zhambyl Oblast sections) that year.

In 2010, ADB approved three loans totaling $608 million. An SME Investment Program Tranche 1 project to enhance efficiency and competitiveness of the financial sector and SMEs was approved as part of a $500 million MFF. The other two were the CAREC Transport Corridor 1 Tranche 3 and the CAREC Transport Corridor 2 Tranche 1. In 2011, ADB approved the CAREC Transport Corridor 1 Tranche 4 and the CAREC Transport Corridor 1 (Taraz Bypass) loans totaling $339 million.

Recent technical assistance projects include: preparation of the CAREC road projects in 2009 ($825,000); (ii) capacity development to support SME development approved in 2010 (for $650,000) and (iii) preparation of the Astana Lightrail Transport project ($565,000) approved in 2011.

In 2011, an energy efficiency diagnostic study to identify investment priorities totaling $200,000 was also approved. Kazakhstan also participates in a number of ongoing regional TA projects.

Private sector operations of ADB in Kazakhstan began in 2006, and have been focused on the banking sector, with five private sector financings amounted to $375 million. Near-term ADB private sector financing prospects are in the areas of private infrastructure and natural resource projects.

Kazakhstan was one of the 4 founding partners of the CAREC Program in 1997 (together with China, Kyrgyz Republic, and Uzbekistan). Since then, six other countries have joined the partnership, and CAREC-related investments in the partner countries have totaled $17 billion, over the period 2001–11. Four of the six CAREC road and rail corridors traverse Kazakhstan, developing these Central Asian corridors is a priority for achieving the vision of land bridges connecting Europe and Asia.

A new country partnership strategy (CPS) to guide ADB operations during 2012–16 is being prepared. The CPS proposes to support economic diversification and the increased competitiveness. It envisages support for regional cooperation, private sector development, inclusive growth, and knowledge exchange. Under the CPS, ADB’s support will focus on transport, finance, urban, and energy sectors. Important corporate level cross-cutting themes include regional cooperation, gender, environment and climate change, good governance, and private sector development and operations.

Annex V. Statistical Issues

(as of May 1, 2012)

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Kazakhstan: Table of Common Indicators Required for Surveillance

(As of May 20, 2012)

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Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discounts rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

Reflects the assessment provided in the update of the data ROSC published in February 2008, based on the findings of the mission that took place during November 29–December 13, 2006 for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).

Same as footnote 8, except referring to international standards concerning (respectively) source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.