- Decision
- Maintain
- Rate change
- 0 bps
- base rate
- 18%
The Monetary Policy Committee of the National Bank of Kazakhstan (NBK) left the base rate unchanged at 18 percent on 28 November, arguing that stubborn demand-driven price pressures, elevated core inflation and volatile, rising expectations require the continuation of a “prolonged moderate” monetary tightness to secure disinflation. The hold follows a 150 bp hike in October that had lifted the rate to its current level after several months at 16.5 percent. While the statement contained no new operational changes, the NBK reaffirmed its intention to keep liquidity conditions tight through higher reserve requirements and “mirroring” gold purchases. Annual inflation edged down to 12.6 percent in October from 12.9 percent in September thanks to an administrative cut in utility tariffs, but core inflation was still 12.2 percent and one-year-ahead household expectations rose to 13.6 percent, with roughly 80 percent of the CPI basket climbing above the 5 percent target. GDP grew 6.4 percent year-on-year in January–October, propelled by fiscal and quasi-fiscal stimulus, strong investment and an 8.7 percent rise in real retail turnover, while brisk consumer lending continues to underpin demand. The bank noted lingering external risks from elevated global food prices, trade disputes and geopolitical tensions, and it retained a baseline Brent crude assumption of USD 60 per barrel. Signalling a firmly hawkish bias, the NBK sees no scope to cut rates before the end of H1 2026 and warns it “cannot rule out” further tightening should convincing evidence of sustained disinflation fail to emerge.
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.