Following October 08 trading, KZT exchange rate made 424.81 KZT per USD gaining 0.3% for the week (from 425.94). EM currencies demonstrated mainly negative dynamics amid improved yield on US treasury bonds, which in turn has given the US Dollar a support. Moreover, driving forces of USD growth were Fed’s hawkish rhetoric and study by the Senate of a draft law to cancel limits for public borrowings until late 2022.

Foreign exchange rates of the emerging market currencies[1] demonstrated the following dynamics against the USD:

• Russian ruble gained 1.3% (from 72.67 to 71.75) against the background of general demand for risk on global market and appreciating oil when its price reached $83 per barrel for the first time since 2018;
• Indonesian rupee appreciated by 0.6% (from 14308 to 14223) against adoption of a new draft law on tax reform designed to increase value added tax and also high commodity prices;
• South African rand lost 0.3% of its value (from 14.88 to 14.93) against the background of a strong USD and growing return on US treasury bonds;
• Mexican peso depreciated by 1.2% (from 20.45 to 20.7) in connection with USD consolidation and improved return on US treasury bonds;
• Indian rupee lost 1.2% (from 74.13 to 74.99) amid a swing in global oil prices and global USD;
• Turkish lira lost 1.2% of its value (from 8.86 to 8.97) amid concerns about trust to monetary policy and also enhancement of the US currency;
• Brazilian real depreciated by 2.8% (from 5.36 to 5.51) in conditions of growing return on US treasury bonds and lack of clarity concerning 2020 budget.

[1] most USD-traded currencies of emerging countries

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