Kazakhstan’s National Bank Lowers Base Rate to 16.5%

ASTANA – The Monetary Policy Committee of Kazakhstan’s National Bank decided to reduce the base rate to 16.5% per annum from 16.75% (July), the bank’s press service reported on Aug. 25.

The National Bank of Kazakhstan. Photo credit: exk.kz.

The decision came amid gradually weakening pro-inflationary pressure from the external environment, where most countries observe a slowdown in inflation due to central banks policies aimed at ensuring price stability.

Despite this, however, inflation remains high, causing a delay in the expected timeline for rate reductions in developed countries. In the meantime, prices in global food markets and logistical costs are decreasing.

The domestic economy is still pressurized by expanding fiscal stimulus, sustained domestic demand, high and unstable inflation expectations, and rising production costs.

Inflation expectations, despite a slight decrease, remain elevated. Year-ahead expected inflation decreased to 16.9% in July from 17.2% in June. Perceived inflation also remains high at 18.6%.

Meanwhile, the bank improved its economic growth forecast for Kazakhstan, raising it to 4-5% in 2024-2025 due to the expansion of business activity driven by sustained domestic demand, increased budget expenditures, and the recovery of the oil sector.

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