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Kazakhstan changes recommended rates on deposits in national currency

Business Materials 2 July 2020 12:16
Kazakhstan changes recommended rates on deposits in national currency

BAKU, Azerbaijan, Jul. 2

By Nargiz Sadikhova - Trend:

Kazakhstan Deposit Insurance Fund (KDIF) has reconsidered maximum recommended rates on tenge denominated deposits for August, 2020, Trend reports with reference to the KDIF.

The upper limit of the maximum interest rates on deposits was set at 14.5 percent (base rate plus 5 percentage points), which allows deposits to maintain increased profitability.

The rates on savings deposits placed for 12 and 24 months will amount to 12.4 percent and 12.3 percent for deposits with replenishment option, and 14.5 and 14.3 percent for deposits without replenishment option.

The maximum recommended rates for term deposits for 12 months, will remain at the same level as in Jul. 2020.

At the same time, deposit rates with a maturity of 24 months will decrease and amount to 9.5 percent for those without replenishment right and 8.7 percent for those with replenishment right.

“A significant reduction in rates on these types of deposits indicates a low interest and economic inexpediency of maintaining higher rates by banks,” the report said.

The report said that this decrease of maximum recommended rates for non-term and short-term deposits in tenge is the final stage of a smooth reduction of rates started by the fund in May of this year.

As a result, the maximum rate on non-term deposits in tenge will be set at 9.5 percent per annum in August 2020, which corresponds to the base rate of the Kazakhstan’s National Bank.

Rates on term deposits for 3 and 6 months with the right to replenish will also be 9.5 percent, without the right to replenish the rate will be 10 percent. Rates on savings deposits for similar periods will amount to 10.5 percent with replenishment and 11 percent for those without replenishment right.

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