Some of Kazakh banks will need capital injections to tide them over current market stresses and the National Bank is in discussions to provide liquidity in the local tenge currency, Prime Minister Karim Massimov told Reuters.

The oil exporting nation is suffering from crude's price fall to around $30 per barrel and the recession in neighbouring Russia. Its tenge currency has slid to record lows against the dollar and economic growth last year was a meagre 1.2 percent. Oil provides more than half its budget revenues.

The moves have revived memories of the period immediately after the 2008 global crisis when several Kazakh banks defaulted on external debt. Fitch recently downgraded some bank ratings, warning of pressures on asset quality and capitalisation.

Massimov said he did not envisage a similar crisis, noting that Kazakh banks' debt level now was far less than in 2008 when it exceeded 50 percent of the gross domestic product.

Speaking to Reuters on the sidelines of the World Economic Forum in Davos, Mr Massimov who was prime minister also in 2008, said some banks would need capital injections.

Instead, it will rely on an oil fund, where it has saved $66 billion, with plans to withdraw up to $8 billion a year for budget support if needed, the prime minister said.

The central Asian country also last year announced plans for sweeping privatisations, due to start as early as this year, to cope with the low commodity prices. Mr Massimov did not give a timeframe but said companies would be sold off in full via stock market listings or stake sales.

According to Kazakh PM, all national companies will be privatised including national oil, railway and telecoms companies.

Photo: www.kazakh-zerno.kz