Explain one reason why a country might operate a managed exchange rate. Refer to Extract D in your answer.
Kazakhstan's national currency, the tenge (KZT), has experienced significant pressure due to its heavy reliance on crude oil exports. To counter this, the National Bank of Kazakhstan has operated a managed float, actively intervening in the foreign exchange market. Between 2015 and 2025, the central bank bought foreign reserves during oil booms to prevent excessive appreciation of the tenge, which would harm the competitiveness of non-oil domestic manufacturers. Conversely, during oil price crashes, it sold foreign reserves to stem rapid depreciation, thereby keeping the costs of imported capital goods stable and preserving domestic investment projects.
