Kazakhstan ousts central bank chief

Kairat Kelimbetov, Governor of the National Bank of Kazakhstan I met in Almaty in September, has lost its job and been replaced by a presidential aide.

Bloomberg reports:

President Nursultan Nazarbayev named Daniyar Akishev, 39, an aide in his administration and former deputy governor at the central bank, to succeed Kelimbetov, according to a decree posted on his website Monday. “Trust in the national currency and the central bank is low -- this can’t be allowed,” Nazarbayev said in a statement. “There is a deficit of tenge liquidity in the country, lending is declining. Work needs to be done to fix this poor performance.”

Kelimbetov, who I privately met at least twice, seemed to be taking an overly low-profile role at a time when the central bank came under pressure to clearly explain its foreign exchange policy. Though since the beginning of this year he has increased his media exposure, the Governor - as far as I could see - remained shy of media and the public.

Kelimbetov's successor Akishev, who will be drawing on his former central banking experience, faces an uphill struggle to come out of the president's shadow and regain public trust for the embattled central bank.

Transparency, and consistent communication, will in no doubt be required for him to succeed. It remains to be seen if the current Kazakh reality will make it possible for the central bank head to speak, at least to a certain degree, independently and clearly to the markets and the public.

Kate Mallinson, a partner at London-based political risk advisory firm GPW & Co., neatly summed up the new Governor's challenge in the Bloomberg story:

He “faces the unenviable and Sisyphean task of trying to restore public confidence in the central bank’s monetary policy and is likely to have been one of the few individuals willing to take on the kamikaze position of the governor with Kazakhstan’s bleak and uncertain economic outlook.”