- Decision
- Maintain
- Rate change
- 0 bps
- base rate
- 18%
The Monetary Policy Committee of the National Bank of Kazakhstan left the base rate unchanged at 18.0% with a ±1 pp corridor, judging that moderately tight conditions, a stronger tenge and softer consumer demand are fostering disinflation yet that core inflation, still above the 5% target-consistent level, and high inflation expectations warrant caution. After a 150 bp hike to 18.0 % in October 2025, the rate has been on hold. Liquidity is being drained through higher minimum reserve requirements and mirroring FX operations, reinforcing the policy stance. Annual headline inflation eased to 11.0 % in March from 11.7 % in February, while monthly inflation slowed to 0.6 %; first-quarter GDP grew 3.0 % year on year, driven by construction, transport, manufacturing and trade, amid cooling retail lending. The firmer exchange rate is supporting disinflation, but external risks are mounting as Middle East tensions lift global energy, food and fertilizer prices, and elevated inflation abroad could raise import costs. The committee highlighted upside risks from the forthcoming end of the moratorium on utility and fuel prices, potential second-round effects from regulated-price increases and tax changes, and underscored the need for fiscal consolidation and calibrated quasi-fiscal stimulus. It will consider lowering the base rate in future meetings if the disinflation trend proves durable and no new shocks 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.