* Kazakhstan moves away from focus on dollar, to deter speculators
* New peg seen as a more predictable and flexible rate mechanism
By Mariya Gordeyeva
ALMATY, Aug 28 (Reuters) - Kazakhstan's central bank said on Wednesday it would peg the tenge currency to a basket of foreign currencies, a similar system to that used by its close trade partner Russia.
The new system will start on Sept. 2, replacing a managed float of the tenge that used the dollar as a reference currency.
National Bank Chairman Grigory Marchenko said the move aimed to move Central Asia's largest economy away from a pure dollar focus to an array of currencies that better reflects underlying trade flows, and to deter speculators.
The U.S. dollar will account for 70 percent of the currency basket, the euro for 20 percent and the Russian rouble 10 percent, the bank said.
The initial rate of the tenge to the basket of foreign currencies will be set at 113.7 tenge, Marchenko said.
"We do not rule out that hina's yuan can become part of the currency basket in the future," he told a news briefing.
"The main advantage of introducing a multi-currency basket will be a gradual reduction of the role of the U.S. dollar on the internal market and in foreign trade."
Kazakhstan's economy relies heavily on exports to the European Union, China and large northern neighbour Russia. Kazakhstan's imports are dominated by Russia and China, which neighbours Kazakhstan in the southeast.
The vast Central Asian nation, which is a major producer and exporter of oil, industrial metals, uranium and grain, is a member of a customs union with Russia and Belarus.
Russia's central bank runs a managed float of the rouble against a target currency basket made up of dollars and euros.
The policy allows Russia's central bank to use market interventions to smooth volatility, without having to defend levels that might encourage a speculative attack.
"I think they are following in Russia's footsteps ... and the Russian currency basket regime has worked quite well in recent years," said Tim Ash, analyst at Standard Bank.
"They (Kazakhstan) need to have a system which mirrors the rouble," said Barbara Nestor, emerging markets strategist at Commerzbank London.
The steppe nation of 17 million, the second-largest post-Soviet oil producer after Russia, had previously used a currency corridor which it dropped in 2011.
The new peg reflects Kazakhstan's "medium-term strategy of moving towards a flexible tenge", said one Moscow-based analyst who covers the former Soviet Union. "This is a first step on the road to a more flexible, floating corridor arrangement."
Marchenko said the peg to a currency basket was set "to lessen speculative moods on the market".
"It will soften negative consequences of inflows and outlows of speculative capital ... which cause volatility of the tenge against the dollar," he said.
The official rate of the tenge rose to 152.16 per dollar on Wednesday from 152.47 in the previous trading session, and Marchenko said it would not be allowed to strengthen further below 152.
He said the central bank had sold $1 billion in July and bought $800 million in August to help steady the currency.
Short-lived weakening of the tenge to nearly 154 per dollar in recent weeks triggered an avalanche of speculation in Kazakhstan's social networks about its imminent depreciation.
"When the central bank was letting the tenge weaken, locals were worried that they might need to dollarise savings, because it was an unpredictable policy - this is a more predictable policy framework," said Nestor of Commerzbank London.