Kazakhstan Monetary Policy March 2019


Kazakhstan: Central Bank maintains the rate at 9.25%

March 4, 2019

At its 4 March monetary policy meeting, the National Bank of Kazakhstan held the base rate at 9.25%, with an interest rate corridor of plus or minus 1.0 percentage point.

The Bank’s decision to hold the rate steady came against the backdrop of declining inflationary pressures. Inflation slipped to an over three-year low of 4.8% in February from 5.2% in January, remaining within the 4.0%–6.0% target band. Lower fuel costs drove the decline, with some economic slack also contributing to the moderation in prices. While the economy ended 2018 on a solid note, economic activity lost traction at the outset of the year. A downturn in the manufacturing sector amid tougher external conditions, along with a weak construction sector and slowdown in investment, weighed on the reading.

Going forward, growth should continue to be supported by robust domestic demand, shored up by improved credit availability. Meanwhile, inflation should remain within target, with risks mentioned in the Bank’s previous review—namely uncertainty on future oil prices—weighing less on the outlook. Thus, the bank is expected to loosen its stance later on in the year.

The next meeting is scheduled for 15 April.

Kazakhstan Interest Rate Forecast

FocusEconomics panelists see the base rate ending 2019 at 8.95%. Going forward, the Central Bank is expected to continue trimming the interest rate, and our panelists see the rate ending 2020 at 8.38%.


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Kazakhstan Monetary Policy Chart

Kazakhstan Monetary Policy March 2019

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

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