Three different regimes
It is common to hear "the region's currencies" discussed as a single exposure. The official frameworks differ materially. The National Bank of Kazakhstan operates monetary policy under an inflation-targeting framework with a floating exchange rate for the tenge. The Central Bank of Azerbaijan publishes an official manat rate under a managed regime in an economy where hydrocarbon revenues are a dominant external influence. The National Bank of Georgia targets inflation and operates a floating lari, intervening through announced instruments rather than defending a level.
Those differences matter for planning. A floating currency under an inflation target tends to move earlier and more visibly; a managed rate can appear stable for long periods and then adjust. Neither pattern tells you what will happen next, and nothing in this article should be read as a forecast of any exchange rate. What the regime does tell you is how the risk is likely to arrive — gradually and observably, or infrequently and in steps.
Start with liabilities, not with views
A currency exposure is only a risk in relation to something you have to pay. The practical exercise is to list your foreseeable liabilities and label each with a currency and a horizon:
- Living costs in your country of residence, in local currency, indefinitely.
- School or university fees, often in USD, GBP, EUR or CHF, on known dates.
- Property purchase or mortgage servicing, in the currency of the property.
- Retirement income, in the currency of the country you expect to retire in — which may not be today's.
- Family support and medical costs, frequently in a third currency.
Once written down, the mismatch is usually obvious: salary and deposits in one currency, several of the largest future obligations in another. Reducing that mismatch is a structural change; guessing the direction of the rate is not.
What "managing" the mismatch means in practice
Matching is the first tool. Holding near-term local expenditure in local currency and long-horizon foreign obligations in the relevant foreign currency removes the need to have a view at all. Diversification across denominations is the second: it reduces dependence on any single monetary regime, at the cost of accepting movement in the currency you measure in.
Real returns are the third consideration. Local-currency deposits may offer higher nominal interest rates than foreign-currency alternatives; whether that compensates for inflation and exchange-rate movement is an empirical question over your horizon, not a given. Central bank policy-rate and inflation publications are the appropriate primary sources for the current picture.
Finally, access. Convertibility, transfer procedures, documentation requirements and reporting obligations differ by country and can change. Confirm the current position with your bank and the relevant national authority before assuming that funds can be moved on a particular timetable.
The overlooked constraints
Three practical constraints shape what is actually available to internationally mobile professionals in the region.
Tax residence. Where you are tax resident determines how interest, dividends, gains and foreign accounts are reported and taxed. Rules differ across Kazakhstan, Azerbaijan and Georgia, and moving between them changes the answer; each country's tax authority is the primary source.
Custody and reporting. Cross-border account structures interact with automatic exchange of information under the OECD's Common Reporting Standard, which many jurisdictions in the region have committed to. Structures should be chosen on the assumption that they will be visible to your tax authority.
Concentration. Currency risk often arrives alongside employer, property and sector risk in the same economy. Assessing them together usually gives a more accurate picture than looking at the exchange rate alone.
A discipline, not a trade
A workable approach is to review the currency composition of assets and liabilities on a set schedule, adjust the mismatch by degrees rather than in a single move, avoid leverage in a currency you do not earn, and keep enough local liquidity to avoid being a forced converter at an inconvenient moment. If part of your history includes Swiss pension capital, its currency and location are part of the same picture — see Swiss 2nd pillar and 3a when you leave Switzerland.
This is general information, not investment advice, and it does not take account of your circumstances. Exchange rates can move in either direction and past behaviour is not a guide to the future.
A better next step
Before acting, bring the pension, tax and investment decisions into one cross-border review. Hansa Perpetual can help structure the questions and coordinate the planning process with appropriately qualified tax and legal specialists where required.