High dollar volatility: how it affects the value of company assets

According to a recent publication on Forbes.kz, the USD/KZT exchange rate has shown high volatility since the beginning of this year.

For example, the weighted average dollar exchange rate on the Kazakhstan Stock Exchange (KASE) was 433.52 KZT on January 31, 2022, then rose to 495.00 KZT on February 28, 2022, and stood at 473.61 KZT as of the morning of March 29, 2022.

Over the past 30 years, Kazakhstan and its national currency have experienced several crises and devaluations.

The first major devaluation after the post-Soviet period occurred in 1999, when the dollar rose from 85 to 140 KZT. During that time, the average monthly salary dropped from $124 (9,683 KZT) to $99 (11,864 KZT). In subsequent years, the national currency strengthened, and the dollar rate dropped to 120 KZT (in 2008).

Global financial crisis (2008–2013):
In Kazakhstan, the dollar rose from 120 to 150 KZT in 2009.

Sanctions crisis (2014–2018):
In 2014, the exchange rate reached 185 KZT per dollar, and by 2016 it had risen to 340 KZT.

Global pandemic-driven financial crisis (2020–2021):
Until March 2020, the exchange rate was 382 KZT per dollar. After the devaluation, it rose to 400 KZT. In 2021, it reached 420 KZT.

Source: Forbes.kz article

Changes in the national currency’s value can significantly affect the value of a company’s assets, as reflected in the financial position report.

Constant currency fluctuations may require businesses to reassess the value of their company and its assets. This increases the demand for professional valuation services, as accurate and timely valuations are essential for making sound business decisions.

The team of experts at PKF Valuation of Property is ready to help you make economically sound decisions.