Central Bank Rate Cut in Kazakhstan

August 25, 2023

The National Bank of Kazakhstan’s benchmark interest rate has been cut 25 basis points to 16.5%. That remains above on-year CPI inflation of 14.0% as of July, which has fallen from 21.3% in February. Today’s rate reduction was the first easing since July 2020 to a pandemic low of 9.0%. Subsequently, the central bank rate had been increased by a total of 75 basis points in the second half of 2021 and a total of 700 basis points in six increments during 2022. According to a statement from officials,

As a result, the aggregate risk balance, due to some easing of external pressures, remains within a weakly disinflationary zone. With further deceleration of actual inflation and its stable components, a policy of gradual and cautious reduction of the base rate will continue. However, the room for reduction is constrained by the risks of potential fiscal stimulus acceleration in the second half of the year.

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