ASTANA, Kazakhstan, March 7. The National Bank of Kazakhstan has raised its key interest rate to 16.5 percent, Trend reports via Kazakhstan's National Bank.
The Monetary Policy Committee of the National Bank of the Republic of Kazakhstan has decided to set the base rate at 16.5 percent per annum with a corridor of +/- 1 percentage point. The decision was made based on an analysis of actual data, updated forecasts, and an assessment of the inflation risk balance.
The significantly softened monetary and credit conditions, under which current inflation rates are reaching high levels, required active and effective measures to reduce the risk of an inflationary spiral.
“There is an increase in all inflation metrics. Annual inflation accelerated to 9.4 percent in February. Price growth has accelerated across all components, with the highest contribution coming from the rise in service prices. Monthly inflation in February increased significantly, noticeably surpassing the historical average. The figures for monthly core and seasonally adjusted inflation (14.2 percent and 16.9 percent, respectively, in February on an annualized basis) indicate substantial internal demand pressure amid continued fiscal stimulus and ongoing overheating in consumer lending (33.5 percent year-on-year by the end of 2024). In addition, inflation expectations among the population rose again in February to 13.7 percent,” the National Bank reported.
The National Bank also noted that in the baseline scenario, the price of Brent crude oil is expected to remain at $70 per barrel on average until the end of the forecast period. The scenario conditions have been formed based on the actual price dynamics and the anticipated excess of oil supply over demand in the market.
The inflation forecast for the coming years has been raised due to new factors. Inflation in 2025 is expected to be in the range of 10-12 percent, and in 2026, it is expected to be 9-11 percent. By the end of 2027, inflation is expected to decrease to the level of 5.5-7.5 percent as a result of restrictive monetary policy and a reduction in fiscal stimulus due to the planned tax reform.
The next rate decision will be announced on April 11, 2025.