Kazakh Central Banker Ouster Ends Tenure That Began After Riots

(Bloomberg) -- The Kazakh president dismissed Galymzhan Pirmatov as central bank governor and named Timur Suleimenov to replace the official who led the institution after riots shook the country over a year ago.

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The Senate voted to approve Suleimenov’s candidacy on Monday soon after Tokayev issued a decree removing Pirmatov, 51, from the post he’d held since February 2022. The tenge weakened after the announcement, closing down 0.2% against the dollar, according to data compiled by Bloomberg.

“We’ve been thinking about the task of ensuring sufficient business lending for several years now,” President Kassym-Jomart Tokayev said during a meeting with the central bank’s new leadership.

“It’s important to find balanced solutions on this issue and actively stimulate the introduction of new approaches, tools and mechanisms,” the president said.

The pick represents a change of tack for Kazakhstan by giving the reins of monetary policy to a more political appointee after what was largely a by-the-book approach under Pirmatov. Suleimenov was responsible for economic policy as a top official in the presidential administration.

Besides control over interest rates and its own reserves, the central bank also manages assets in Kazakhstan’s $60 billion oil fund along with retirement savings held in the unified pension fund.

Central Asia’s largest oil producer is trying to move past currency turmoil and an inflation spiral following the Russian invasion of Ukraine in February 2022. The Kazakh central bank raised rates sharply when the war began, delivering a total of six hikes last year.

Suleimenov, 45, has served as the president’s first deputy chief of staff since the deadly unrest in January 2022 that Tokayev called an attempted coup against him. Prior to joining the presidential administration as an assistant in 2019, he worked as deputy central bank governor for less than a month and was economy minister before then.

Under Pirmatov’s stewardship, the National Bank of Kazakhstan was criticized for keeping rates high and throttling access to credit, including a decision late last year to put a limit on a program that subsidized mortgages, leading to a slowdown in housing purchases.

Prior to leading the central bank, Pirmatov was chief executive officer of Kazatomprom, the world’s largest uranium miner, from 2017 to 2021. He was deputy central bank governor in 2015-2017.

In late August, the central bank delivered its first interest-rate cut since 2020 with a reduction of just a quarter-percentage point, after keeping the benchmark near the highest on record for five straight meetings.

But just last week, however, Tokayev said “the economy needs money” and called for measures that could prompt banks to boost lending and redistribute their windfall profits.

Kazakhstan is among countries that have seen inflows of Russian money since the US and its allies imposed sanctions on the Kremlin in punishment for the invasion of Ukraine. Russia is one of Kazakhstan’s biggest trading partners, and their commercial ties remain largely unscathed more than 18 months after the war began.

Along with other Russian neighbors, Kazakhstan has come under scrutiny from the US and the European Union as they try to stiffen the enforcement of sanctions and do more to prevent Russia from evading export restrictions.

Speaking at the meeting on Monday, Tokayev also told officials to work closely with central bank and financial institutions abroad.

“In the current geopolitical conditions, global regulators are increasingly interested in our financial system,” Tokayev said. “Therefore, it is important to find a ‘middle ground’ in building such relationships and ensure a proper assessment of the risks and consequences for the financial security of the country.”

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