BAKU, Azerbaijan, July 27. Kazakhstan's monetary policy will be gradually eased to 14 percent by year-end, a source at Fitch Solutions Group told Trend.
"Credit supply conditions will remain tight. Though consumer price growth has peaked at 21.3 percent y-o-y (year-over-year) in February and since fell to an eight-month low of 16.8 percent y-o-y in April, forward guidance from the National Bank of Kazakhstan (NBK) suggests that rate-cuts will not happen before the second half of 2023," said the source. "Even then, monetary policy will only be gradually eased to 14 percent by year-end."
The source said that inflation expectations still remain elevated – rising from 16.5 percent y-o-y in March to 16.7 percent in April – which remains an obstacle for a more rapid slowdown in price growth to reach the NBK's target range of 4-5 percent.
Furthermore, it was noted that similarly, most recent bank lending surveys suggest that Kazakh banks intend to continue to tighten their credit conditions, supporting Fitch Solution's view that credit growth will moderate over the coming quarters.