- Decision
- Raise
- Rate change
- 150 bps
- base rate
- 18%
The Monetary Policy Committee of the National Bank of the Republic of Kazakhstan lifted the base rate by 150 bp to 18.0% per annum, retaining the ±1 pp corridor, citing a sharp broad-based pick-up in inflation to 12.9 % y/y in September from 12.2 % in August, buoyant domestic demand outstripping supply, elevated inflation expectations and a loosening in overall monetary conditions exacerbated by fiscal stimulus and a weaker real effective exchange rate. This follows a 150 bp hike to 16.5 % in March 2025 after which the rate had been kept unchanged. The move is complemented by steps to rebalance foreign-exchange operations, adjust the exchange-rate trading regime and tighten micro- and macroprudential controls, all aimed at supporting tenge assets and anchoring expectations. Inflation pressures are widespread: food prices are rising on higher production and import costs, service inflation is running at 15.3 % on tariff liberalisation, non-food inflation has quickened to 10.8 % amid fuel price hikes, and monthly core inflation accelerated to 1.2 %. GDP growth surged to 6.5 % y/y in January–August, led by transport, construction, trade, mining and manufacturing, with demand further fuelled by rapid consumer lending and expansionary fiscal policy. Externally, elevated global food prices and still-high, albeit easing, inflation in Russia sustain imported price pressures, while the global backdrop is mixed with the ECB on hold and the US Federal Reserve shifting to rate cuts. The Committee warned it stands ready to tighten further if current measures prove insufficient and will base subsequent decisions on incoming data; the next rate announcement is scheduled for 28 November 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.