- Decision
- Lower
- Rate change
- 100 bps
- base rate
- 17%
The Monetary Policy Committee of the National Bank of Kazakhstan cut the base rate by 100 bp to 17.00 % with a ±1 pp corridor, arguing that persistent disinflation, a stronger tenge and a lower balance of pro-inflationary risks now allow some easing while still preserving moderately tight conditions needed to push inflation into single digits. After a 100 bp hike to 18 % in October 2025 the rate had been kept unchanged through April 2026. Annual inflation slowed to 10.4 % in May from the September 2025 peak of 12.9 %; food inflation eased to 10.7 %, services to 8.7 %, while non-food inflation held at 11.7 %, and monthly inflation slipped to 0.7 %. Inflation expectations of households stabilised around 12.7 %, and professional forecasters continue to see end-2026 inflation at 10 %. The Bank now projects 2026 inflation at 9–11 % (previously 9.5–11.5 %) and GDP growth at 4.5–5.5 %, supported by stronger economic activity and higher Brent oil assumptions of USD 90/bbl this year. A firmer exchange rate and cooler consumer credit growth are helping contain demand pressures, though domestic risks remain from quasi-fiscal stimulus, tariff and fuel-price reforms, and expanding money aggregates; externally, geopolitical tensions could lift global inflation volatility. Leading central banks retain a cautious stance as energy costs keep price pressures elevated. The Committee expects inflation to reach single digits this year and reiterated that future rate decisions will hinge on realised inflation, domestic demand dynamics, fiscal execution and the scale of quasi-fiscal support.
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.