What Is the Kazakhstan Tenge (KZT)?
The Kazakhstan tenge (KZT) is the national currency of Kazakhstan. It was introduced in 1993, replacing the Russian ruble. Prior to its independence in 1991, Kazakhstan was a part of the Soviet Union.
- The KZT is the national currency of Kazakhstan.
- Since 2009, the KZT’s value has steadily declined against the U.S. dollar (USD).
- Kazakhstan’s economy is heavily dependent on the exportation of natural resources.
Understanding the KZT
Kazakhstan is a nation in Central Asia with a population of approximately 19 million people. Bordered by Russia, China, Kyrgyzstan, Uzbekistan, and Turkmenistan, Kazakhstan has the largest land mass in Central Asia and it is the tenth largest country in the world. Since obtaining its independence from the Soviet Union in 1991, Kazakhstan has become a republic with a parliamentary system. Its official languages are Kazakh and Russian.
The KZT is divided into 100 subunits, known as tiyn. Its coins are minted in denominations of 2, 5, 10, 20, and 50 tiyn, as well as 1, 2, 3, 5, 10, 20, 50, 100, and 200 tenge. Its banknotes, meanwhile, are printed in various denominations ranging from 200 to 20,000 tenge. Although its coins and banknotes were previously produced in Germany and the United Kingdom, respectively, today they are produced in Kazakhstan under the oversight of the National Bank of Kazakhstan.
Among the nations that were formerly members of the Soviet Union, Kazakhstan was one of the last to introduce a national currency. The country celebrates the Day of the National Currency of the Republic of Kazakhstan, which honors the day the currency was adopted on November 15th of each year.
Real-World Example of the KZT
The economy of Kazakhstan is reliant on its abundant natural resources. In 1993, Kazakhstan began trying to develop a way to extract the large deposits of natural gas in the region. A contract was signed with the Chevron Corporation (CVX) to tap into one of the largest oil fields in the world, the Tengiz oil field. The Kazakhstan government has been working on establishing an extensive network of pipelines moving through the region to export oil and gas from these fields.
Since 2009, the KZT has declined significantly relative to the U.S. dollar (USD) in international currency exchange markets. Whereas 1 KZT was worth approximately $0.0083 USD in January 2009, this figure has declined to only $0.0024 USD as of January 2021—a decline of over 70%.