- Decision
- Maintain
- Rate change
- 0 bps
- base rate
- 16.5%
The Monetary Policy Committee of the National Bank of Kazakhstan kept the base rate at 16.5 % with a ±1 ppt corridor, judging that entrenched domestic and external price pressures and a heightened pro-inflation risk balance warrant a prolonged period of tight monetary conditions to steer inflation back toward the 5 % medium-term target. After a 150 bp hike in March took the rate to its current level, the Committee has held it steady at successive meetings. The existing policy corridor is unchanged, and officials see a “high” probability the rate will stay at 16.5 % through end-2025, while further increases remain on the table. Annual CPI quickened to 11.3 % in May, core inflation reached 10.1 %, monthly inflation jumped to 0.9 %, and household expectations rose to 14.1 %; the Bank now forecasts inflation at 10.5–12.5 % in 2025 and 9.5–11.5 % in 2026, falling to 5.5–7.5 % by end-2027. GDP growth is projected at 5–6 % in 2025 and 4–5 % in 2026 on resilient domestic demand and investment, despite weaker export prospects. External pro-inflation pressures include double-digit inflation in Russia, elevated global food costs and a lower Brent oil assumption of USD 60 per barrel through the forecast horizon, while escalating trade conflicts and commodity-price volatility keep global uncertainty high.
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.