Rate Hikes in Kazakhstan and Tajikstan

October 25, 2021

Two central banks from the former Soviet empire raised interest rates in response to rising and above-target inflation.

The National Bank of Tajikstan lifted its policy rate by 25 basis points to 13.25%. The rate had been raised previously this year by a full percentage point in both April and July after an initial 25-basis point hike done in February, and the rate level is now at its highest level since November 2019. CPI inflation of 9.6% currently is above the NBT’s target corridor of 4-8%.

Officials at the National Bank of Kazakhstan also lifted their interest rate by 25 basis points. This move followed similar increases in July and September. Last year after initially hiking the rate by 275 basis points to 12.0% in March, officials hurriedly slashed such by 250 bps in April and a further 50 basis points in July. The rate now stands at 9.75% compared to a 59-month consumer price inflation high of 8.9%. Medium-term inflation is targeted at 4-6%.

Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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