Due to the ongoing global oil prices drop Kazakhstan may need assistance from international financial institutions - FT
Almaty. February 2. Silkroadnews - The ongoing decline in the global oil prices raises the probability for some oil exporters to need the financial assistance from the IMF and the World Bank, KazTAG reports with reference to Financial Times.
“Kazakhstan and Russia are two biggest former Soviet republics dealing with the production of oil, have been affected by the fall in oil prices. Yet, both countries, the experts believe, do have the reserve stocks, which shall protect them for a short period of time,” - Oxford Economics experts say.
At the same time, as the article notes, if the current low oil prices last further, the situation for both Russia and Kazakhstan could deteriorate.
“Russia can use all the reserves set aside “for a rainy day” to cover the budget deficit for 18 months. Besides Russia has also reduced access to the external debt markets due to the Western sanctions,” the publication says.
Both for Russia and Kazakhstan, the devaluation means a situation under which the banking sector and big companies with significant external debt in US dollars may need a support.
Meanwhile, while the Russian oil producers make profit at the current oil prices, the Kazakhstani companies experience a strong pressure.
Thus, RDGZ “KazMunayGas” reports the production can be restored under $65 per barrel oil price.