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Kazakhstan Monetary Policy July 2023

Kazakhstan: Central Bank leaves rates unchanged for fifth consecutive meeting in July

At its meeting on 5 July, the National Bank of Kazakhstan (NBK) kept its base rate at 16.75% for the fifth consecutive meeting. Meanwhile, the interest rate corridor was maintained at plus or minus 1.0 percentage points.

The decision to hold the rate was driven by the gradual deceleration of annual and monthly price increases in June, in line with the NBK’s forecasts, despite higher inflation expectations for the year ahead. Declines in global food and energy prices also contributed to the decision to leave rates unchanged, as these will likely exert downward pressure on headline inflation.

In line with its previous statements, the NBK provided explicit forward guidance, emphasizing that “the slowdown in inflation is beginning to create space for gradual reduction of the base rate in the future”. In contrast with its last meeting, the NBK added that there might be room for a prudent decrease at the next meeting, set for 25 August. Our Consensus is for a decrease in interest rates later this year.

The next meeting is scheduled for 25 August.

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