Kazakhstan Monetary Policy January 2019


Kazakhstan: Central Bank holds base rate steady at 9.25% in first meeting of the year

January 14, 2019

At its 14 January monetary policy meeting, the National Bank of Kazakhstan kept the base rate at 9.25%, with an interest rate corridor of plus or minus 1.0 percentage point.

Stable inflation throughout the final quarter, lower inflation expectations, and healthy economic activity prompted the Bank to stay put. Inflation remained at a more than three-year low of 5.3% for the third consecutive month in December, staying close to the lower boundary of the Bank’s 5.0%–7.0% target band, with some economic slack helping inflation to moderate. Despite a sharp fall in oil prices over the period, economic activity continued to grow at a healthy pace, thanks to a boost in oil production and robust domestic demand dynamics. While inflation is expected to remain within the new target range of 4.0%–6.0%, the main risk to the inflation outlook continues to stem from uncertainty surrounding future oil prices.

In terms of forward guidance, the Bank indicated a more hawkish stance on a weakening in the tenge and signaled the possibility of a rate hike in the next meeting, which is scheduled for 4 March.

FocusEconomics panelists see the base rate ending 2019 at 8.81%. Going forward, the Central Bank is expected to continue trimming the interest rate, and our panelists see the rate ending 2020 at 8.25%.


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Kazakhstan Monetary Policy Chart

Kazakhstan Monetary Policy January 2019

Note: NBK base rate in %.
Source: National Bank of Kazakhstan (NBK).

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