- Decision
- Maintain
- Rate change
- 0 bps
- base rate
- 16.5%
The Monetary Policy Committee of the National Bank of Kazakhstan on 11 April 2025 left the base rate unchanged at 16.5 percent with a ±1 percentage-point corridor, arguing that elevated service-sector costs, faster food inflation and persistent external price pressures require a continued restrictive stance despite some signs of monthly disinflation. The hold comes after a 125 bp hike in March from 15.25 percent earlier in the quarter. The central bank said aggregate monetary and credit conditions remain “moderately tight”, with FX reserve operations and forthcoming macro-prudential and reserve-requirement measures expected to bolster the rate’s disinflationary impact. Annual CPI accelerated to 10 percent in March, within the 10–12 percent 2025 forecast range, though monthly inflation eased to 1.3 percent and core inflation held at 0.9 percent; short-term GDP growth reached 5.8 percent y/y in Q1, supported by transport, construction and manufacturing, but retail turnover growth cooled to 5.1 percent in February. Professional inflation expectations rose to 10.6 percent, and pro-inflationary risks stem from further tariff hikes, planned tax increases and strong though moderating domestic demand. Externally, high global food prices, double-digit inflation in Russia and heightened uncertainty around US trade policy, lower oil prices and increased market volatility continue to pose upward price risks. The committee warned that conditions for reducing the base rate “have not yet formed” and pledged to base future decisions on incoming data and the evolving balance of inflation risks.
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.