- Decision
- Lower
- Rate change
- 50 bps
- base rate
- 16.25%
The National Bank of Kazakhstan cut the base rate by 50 basis points to 16.25%, with a plus or minus 1 percentage point corridor, as easing inflation and household expectations allowed some loosening, although stronger pro-inflationary risks limit scope for further cuts. After raising the rate to 18% in October 2025 and holding it through April 2026, the central bank cut it in June and July. Annual inflation slowed for an 11th consecutive month to 9.8% in August and is forecast at 9-11% in 2026, while the 2027 forecast was raised to 6.5-8.5% due to higher external inflation, revised regulated-price assumptions and greater fiscal stimulus. Gross domestic product growth is projected at 4.5-5.5% in 2026, supported by investment and sustained consumer demand, while the final increase in minimum reserve requirements in September will provide additional restraint. A firm tenge exchange rate has supported disinflation. Externally, the continuing Middle East conflict is keeping energy prices elevated and reinforcing inflationary pressure, while global food prices increased slightly and major central banks maintained hawkish rhetoric. Future decisions will depend on inflation, domestic demand, expectations, regulated prices and fiscal and quasi-fiscal stimulus, with policy aimed at bringing inflation close to the 5% medium-term target in 2028.
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.