Kazakh National Bank Lowers Base Rate to 12 Percent

ASTANA – The National Bank of Kazakhstan has reduced the base interest rate to 12 percent with a corridor of plus or minus 1 percentage points, according to its Chairman Daniyar Akishev.

The liquidity provision operations rate is now 13 percent with the liquidity withdrawal operations rate at 11 percent.

The Bank lowered the rate because of the downward trend of inflation, which is consistent with the National Bank’s forecast, said Akishev.

“Also, de-dollarisation of bank deposits and the decline in inflation expectations continues. At the same time, we have a sufficiently balanced approach to the decisions on the base rate. Reducing the base rate is possible with a substantial improvement in the economic situation and persistent signs of stability in the financial market,” he said.

“Increased uncertainties in the global markets, which may be followed by the slowdown in the process of reallocation of foreign currency assets into the national currency, as well as the sensibility of the economy and the financial sector to external shocks, require a cautious approach to further reduction in the base rate. Should the economic situation significantly improve and persistent signs of stabilisation in the financial market are present, further cuts are possible,” the National Bank’s Nov. 14 press release said.

The base rate is the interest rate that is emerging in the financial market on overnight loans between market participants.

The National Bank had lowered its base rate to 12.5 percent on Oct. 3. The next decision will be announced Jan. 9.