In February 2014, the National Bank of Kazakhstan (NBK) devalued the tenge by 19% against the US dollar. The devaluation was intended to boost the country's exports and make its goods more competitive in international markets. However, the devaluation also had a number of negative consequences, including making the country's poor worse off.

The devaluation of the tenge decreased the purchasing power of the country's poor by making it more expensive to buy imported goods. Additionally, the devaluation also led to an increase in the cost of living for the poor, as the prices of domestically-produced goods and services also rose. This was due to the fact that many businesses in Kazakhstan import their inputs, so the cost of production increased as a result of the devaluation.

Increased Cost of Living

The rise in the cost of living due to devaluation affected the poor disproportionately, as they spent a large portion of their income on basic necessities such as food and housing. The prices of these items rose sharply, making it difficult for the poor to afford them. As a result, many families were forced to cut back on their spending, leading to a decline in their standard of living.

Unemployment

The devaluation also contributed to an increase in unemployment in Kazakhstan. Many businesses in the country were forced to lay off workers as a result of the rising costs of production. As a result, many Kazakhs lost their jobs and were unable to find new ones, further exacerbating the economic situation for the poor.

Conclusion

The devaluation of the tenge in Kazakhstan had a number of negative consequences for the country's poor. It made it more expensive to buy imported goods, increased the cost of living for the poor, and contributed to an increase in unemployment. These factors combined to make the country's poor worse off.