- Decision
- Maintain
- Rate change
- 0 bps
- base rate
- 16.5%
The Monetary Policy Committee of the National Bank of Kazakhstan on 11 July 2025 left the base rate at 16.5 % within a ±1 pp corridor, arguing that stubbornly high price pressures from tariff reforms, fiscal stimulus and vigorous consumer demand outweighed the recent slowdown in monthly inflation. Following a 125 bp hike to the current level in March, the rate has been kept unchanged at the subsequent three meetings. The central bank said the existing moderately tight stance will be buttressed by mirrored foreign-exchange operations, revised minimum reserve requirements and macro-prudential limits on retail lending. Annual inflation picked up to 11.8 % in June even as monthly inflation eased to 0.8 %, with core inflation at 0.9 %; GDP expanded 6 % y/y in January–May, driven by strong transport, construction and a 32.4 % surge in consumer credit. External cost pressures have moderated thanks to slower inflation in Russia, but global food prices remain high and commodity markets volatile, while oil trades near levels envisaged in the optimistic scenario. Against a global backdrop where the ECB is cutting rates, the Federal Reserve is on hold and the Bank of Russia has trimmed its key rate to 20 %, the committee signalled it is likely to keep the base rate steady through end-2025 yet “does not rule out” further tightening if necessary, with the next decision due 29 August 2025.
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.