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ALMATY, March 16 (Reuters) - The Kazakh tenge dropped almost 4% against the dollar in the interbank market on Monday after the central bank said it would stick to a free float regime and kept its policy rate unchanged.
The tenge hit an all-time low of 422.07 per dollar in early trading. On the Kazakh Stock Exchange, trading went into the Frankfurt auction mode, which automatically kicks in on movements bigger than 1.5%.
Kazakhstan's central bank kept its policy rate unchanged at 12.0% on Monday and indicated it would reduce its involvement in the foreign exchange market after intervening last week to smoothen the tenge's fall.
The bank said there was now a higher risk of inflation exceeding the 6% target range ceiling this year due the impact of the coronavirus, and that it had slashed its outlook for the average 2020 Brent crude price to $35 per barrel from $60. (Reporting by Olzhas Auyezov; Editing by Christian Schmollinger and Sam Holmes)