“We planned our 2016 budget with $40 to the barrel. We reviewed all the scenarios with $30, $25, $20, and the bottom level of $16. We’re currently testing these figures,” Massimov said.
"It’s early to make any hasty decisions now. We have to wait a few more weeks. We’ll see if the situation stabilizes and will make our corrections based on that."
Kazakhstan does not rule out further fluctuations of its national currency (the tenge) against the US dollar in the short term as oil prices are expected to drop, Massimov told Sputnik on the sidelines of the World Economic Forum.
"I expect that, most likely, oil prices will continue to drop in the short term. And with that, there will be tenge fluctuations against the dollar and vice versa."
According to the prime minister, a long term forecast on the tenge will be possible to make in a few weeks when the situation stabilizes.
"I think we will reach a point of relevant stability very soon, and in the foreseeable future, I think in a couple of weeks, we will see stabilization, both of the tenge against the dollar rate and the dollar to the tenge rate as well. I think it is very important. When we reach a point of balance, then the situation will stabilize and it will be possible to make long term forecasts," Massimov explained.
Earlier this week, the tenge dropped to a record low of about 372 per dollar. At the start of 2016, the exchange rate was about 340 tenge per US dollar.
"I would like to point out that I hold regular consultations with Russian Prime Minister Dmitry Medvedev, with the ministers of economy, ministers of finance. We hold consultations between the heads of central banks and adjust our position [on the tenge exchange rate]," Massimov added.
On November 11, Massimov announced that Russia and Kazakhstan were discussing the possibility of coordinating their central banks' exchange rate policies.
Kazakhstan to Announce Budgetary Corrections in February
"When we drafted the budget in parliament, we aimed for different figures — around $50 per barrel, and we have already made significant cuts. Depending on how the situation develops, other possible corrections to the budget are likely. But we will announce [them] for sure in February," Karim Massimov told Sputnik.
According to the prime minister, Kazakhstan's current 2016 budget plan is based on oil costing $40 a barrel.
There is a strong probability that the implementation of new projects will be delayed, he added.
"Probably, we will reduce the number of new projects. The focus will be more on projects that need to be completed. We will probably postpone projects that [we] are starting from scratch until better times," Massimov stressed.
In late 2015, Kazakhstan ratified an agreement for a $1-billion loan provided by the Asian Development Bank (ADB) after the country floated its national currency, the tenge, which resulted in its significant devaluation. The loan will be used to finance the budget deficit, ensuring support for the country's main social and economic development priorities and the implementation of strategic measures by the government to stimulate the economy and promote economic growth.