- Decision
- Raise
- Rate change
- 125 bps
- base rate
- 16.5%
The Monetary Policy Committee of the National Bank of Kazakhstan raised the base rate by 125 bp to 16.5%, keeping the corridor at ±1 pp, saying the recent broad-based surge in prices and loosening financial conditions demanded “active and effective” action to avert an inflationary spiral. After holding the rate at 15.25 % in January, the committee pointed to February’s jump in headline inflation to 9.4 %, core inflation of 14.2 % and inflation expectations at 13.7 %, all fuelled by strong domestic demand and consumer lending growth of 33.5 % y/y at end-2024. The bank lifted its inflation forecast to 10–12 % for 2025 and 9–11 % for 2026, expecting a fall to 5.5–7.5 % by end-2027 as restrictive policy and planned tax reforms take hold, while trimming GDP growth projections to 4.2–5.2 % for 2025-26 and around 4.5 % in 2027. External inflationary pressure—especially from Russia—and still-high global food prices add to upside risks, with baseline assumptions including Brent crude at USD 70 per barrel amid an expected supply surplus. The central bank said the pre-emptive hike should anchor inflation expectations, protect tenge savings and reduce the need for larger moves later, and it will adjust policy as incoming data clarify the balance of risks to price stability.
Rate evolution
Over the period, the National Bank of Kazakhstan raised the base rate by 150 basis points from 16.5% to 18.0%, holding through mid-2025 before tightening in October 2025 and then leaving policy unchanged into April 2026. The early holds reflected persistent inflation and a risk balance that turned increasingly pro-inflationary, as tariff reforms, fuel liberalisation, strong consumer demand, retail lending and fiscal stimulus kept demand above supply, while volatile expectations and external pressures from global food prices, Russia, trade frictions and geopolitical tensions added to price growth. After inflation exceeded forecast and monetary conditions were judged to have loosened, the Bank raised the rate.
More recently, inflation slowed under moderately tight conditions, anti-inflation measures, the stronger tenge and a moratorium on utility and fuel price increases, and by June 2026 the Bank judged that moderate domestic demand and favourable external conditions partly offset accumulated pressures. With annual inflation easing to 10.4% in May from a 12.9% peak in September 2025 and the 2026 forecast revised down to 9.0% to 11.0%, the National Bank of Kazakhstan cut the base rate by 100 basis points to 17.0% on 5 June and by a further 25 basis points to 16.75% on 24 July as inflation edged down to 10.3% in June, while warning that underlying price pressures required confirmation. On 4 September, it lowered the rate by 50 basis points to 16.25% as annual inflation slowed for an eleventh month to 9.8% in August and one-year inflation expectations fell to 12.1% in July, but said scope for further cuts was limited after raising its 2027 inflation forecast to 6.5% to 8.5% and assessing that risks had shifted in a pro-inflationary direction amid stronger fiscal stimulus, unstable expectations, fuel and utility prices, and global food and energy costs.