- Decision
- Lower
- Rate change
- 25 bps
- base rate
- 16.75%
The Monetary Policy Committee of the National Bank of Kazakhstan cut the base rate by 25 basis points to 16.75% on July 24, 2026, with a corridor of +/-1 percentage point, citing a nine-month decline in annual inflation and scope to recalibrate the degree of monetary tightness, while noting that recent monthly data may signal a weakening of the disinflationary impulse and require confirmation; this follows a move to 18.0% in October 2025, holds through April 2026, and cuts to 17.0% in June and 16.75% in July 2026. Annual inflation eased to 10.3% in June from 10.4% in May, monthly inflation was 0.8%, and household one-year inflation expectations rose to 13.4%, while professional participants kept their 2026 inflation forecast at 10.0% and lowered 2027 expectations to 7.8%. Economic activity was strengthening, with GDP up 4.1% in the first half of 2026 and investment growth accelerating to 9.6%, while moderate real income growth and slower consumer lending were helping keep consumer activity at a moderate level. The National Bank of Kazakhstan said current tight monetary conditions, earlier policy decisions, exchange-rate dynamics, higher minimum reserve requirements, mirroring operations and consumer-credit regulation were exerting a restraining effect on inflation. Externally, uncertainty remained high as renewed escalation in the Middle East pushed up energy prices, food prices were mixed, inflation was accelerating in Russia, and the June rate increase by the European Central Bank alongside an unchanged Federal Reserve pointed to tight global monetary conditions persisting for longer. The central bank said the balance of risks remains pro-inflationary, the decision assumes systematic fiscal consolidation and adherence to approved budget, National Fund transfer and quasi-fiscal stimulus parameters, and future decisions will depend on confirming the durability of disinflation, tariff indexation parameters and developments in external fuel and commodity markets, with no pre-set path for the base rate.
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.