Kazakhstan’s National Bank talks easing monetary policy

Kazakhstan Materials 10 February 2023 14:11 (UTC +04:00)
Emin Sevdimaliyev
Emin Sevdimaliyev
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BAKU, Azerbaijan, February 10. Kazakhstan is not currently considering the possibility of easing monetary policy, Galymzhan Pirmatov, the Governor of the National Bank of Kazakhstan, said, Trend reports, citing the Mazhlis of the Parliament of Kazakhstan.

“Despite a possible short-term positive effect on economic growth, it will lead to serious negative consequences,” Pirmatov added.

The governor considers that the unreasonably low profitability of Kazakh tenge assets in the market compared to high inflation will cause a change in currency preferences, both among professional participants in the financial market and among the population. This, in turn, will lead to an increase in devaluation expectations and the weakening of the national currency.

“Consequently, dollarization will resume, and inflationary processes will intensify. The resource base of the banking system will also decrease as a result of the outflow of funds from Kazakh tenge deposits,” Pirmatov noted.

He concluded by saying that easing monetary policy will significantly increase the risks posed to the financial stability of the national economy.

Earlier, the members of Mazhlis of the Parliament issued an official request to the National Bank of Kazakhstan and to Prime Minister Alikhan Smailov. The request aimed to initiate the discussion on the issue of the National Bank of Kazakhstan’s monetary and fiscal policy.