Calling Wednesday’s move “small”, Demetrios Efstathiou, a strategist at ICBC Standard Bank Ltd.in London, said a further devaluation of as much as 15 percent is necessary to “convince the locals to convert some U.S. dollars back to tenges and help ease the huge tenge liquidity pressure in the system”.

“From August 20 the National Bank and the Government have decided to implement a new monetary policy based on inflation targeting and to renounce the earlier practiced currency corridor”, the country’s PM Karim Massimov said in the government sitting today.

“This is not a devaluation, this is a transition to a freely floating rate when the market itself determines a balanced exchange rate on the basis of demand and offer”, National Bank Governor Kairat Kelimbetov told a news conference broadcast from the capital Astana. The currency sank to an all-time low of 256.98 per US dollar in Almaty.

The oil-dependent central Asian country, which trades heavily with Russian Federation and China, is being buffeted by the fall in the rouble and crude prices.

The dual impact of China’s renminbi devaluation – and worries about the country’s slowdown – along with anticipation of a US rate rise is weighing on currencies in emerging markets, already feeling the pain of falling commodity prices.

“It’s a move to prepare for the Fed rate hike”, said Tommy Ong, managing director for treasury and markets at DBS Bank Hong Kong.

The state bank of Vietnam responded to the renminbi depreciation by widening its trading band and lowering its official midpoint rate.

The yuan weakened 4 per cent versus the dollar in the past 12 months and the rouble sank 46 per cent, according to data compiled by Bloomberg.

Benchmark Brent crude is trading at just under $50 per barrel and the US Energy Information Administration (EIA) said last week prices will average less than $60 per barrel throughout 2016.