ALMATY: The tenge lost more than a quarter of its value on Thursday as Kazakhstan fired the latest salvo in an emerging market currency war, ditching a trading band stretched to breaking point by sharp falls in crude and commodities prices.

Prime Minister Karim Masimov said floating the tenge would recover ground that oil-dependent Kazakhstan has lost to declines in the currencies of some of its major trading partners and rivals.

"I believe (this)... will now allow Kazakhstan to be more competitive..., including on the markets of our neighbors," he told a news conference, referring to Russia and China, which sent shockwaves through emerging markets last week by devaluing the yuan.

The float was welcomed by Kazakh oil and mining sector firms.

But analysts warned it might prompt similar action by others in the region, and it dismayed ordinary Kazakhstanis, who had already seen the tenge devalued three times since 1999.

"I am going to a bazaar right now, and the tenge in my wallet are weighing less and less," translator Alexei Chernoussov wrote on his Facebook page. "I don't know if I will buy something before this cash simply evaporates."

The official tenge rate tumbled by 26.2 percent to 255.26 per dollar on Thursday and exchange offices in the financial capital Almaty said they were selling dollars at 253.

Kazakhstan's central bank most recently devalued the tenge, by 19 percent, in February 2014, and the currency has been under immense pressure since last year when the ruble of key trade partner Russia collapsed, driven lower by Western sanctions as well as oil's declines.

Kazakhstan, Central Asia's largest economy and No.2 post-Soviet oil producer after Russia, suffered a 40 percent fall in exports between January and July, said National Economy Minister Yerbolat Dosayev, due to the sharp drop in global oil and commodity prices.

Imports shank by 20 percent in the same period, he said.

Prime Minister Masimov said that low prices for Kazakhstan's commodity exports, which also include significant quantities of metals, might last for five to seven years.

On Wednesday another, smaller trading partner, Vietnam, devalued its dong, and Demetrios Efstathiou, head of CEEMEA Strategy at ICBC Standard Bank in London, said the manat of Caspian Sea neighbour Azerbaijan might be the next domino to drop.