Kazakh national bank increases base rate to 16%
Baku, Azerbaijan, Oct. 2
By Elena Kosolapova - Trend:
The National Bank of Kazakhstan decided to increase its base rate to 16%, the bank said Oct. 2.
"Taking into account economic data and growth outlook the National Bank decided to increase its base rate to 16% to keep inflation over the medium-term within the target range of 6-8%," the statement said.
Standing facility interest rates are 17% - for lending, 15% - for withdrawal of liquidity.
National Bank has made a decision to narrow down its interest rate corridor to ±1 p.p. in order to reduce volatility of money market interest rates and give more clear signals to the market.
The pace of growth of the global economy remains moderate mostly due to economic recovery in USA and the euro area. In contrast, positive effect of global economic growth rate is offset by slowdown in emerging economies. Economic slowdown in China as well as other developing countries led to recent turbulence in global financial markets and further fall in commodity prices. Deepening recession in Russia also contributes to weak growth outlook of the emerging economies. Federal Reserve kept federal funds rate unchanged, but rates could go up later this year, the statement said.
This increases risks of potential capital outflow from emerging markets and make the outlook for economic growth of Kazakhstan more uncertain, the statement said.
The next scheduled date for monetary policy decision is 6 November 2015.
The base rate is the target interest rate that the National Bank expects to be used by the financial market for one day loans (overnight repo) between market participants. In turn, banks are expected to use the base rate as the benchmark to set interest rates on their loans.
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