Kazakhstan: Central Bank stands pat in second April meeting
At an emergency meeting on 27 April, the National Bank of Kazakhstan left the base rate at 9.50% and the interest rate corridor at plus or minus 2.0 percentage points, after having delivered an emergency 250 basis point cut in their previous meeting earlier this month.
The challenging economic conditions posed by the Covid-19 pandemic and the crash in oil prices prompted the Bank to maintain a dovish bias and stand pat despite mounting price pressures. Inflation rose to 6.4% in March (February: 6.0%), exceeding the upper bound of the 4.0%–6.0% target corridor, amid a historic depreciation of the currency. At the same time, private sector conditions have deteriorated as the prolonged quarantine measures and depressed external demand take their toll.
Looking ahead, the Bank projects inflation to be in the range of 9.0%–11.0% this year before slowing in 2021. Meanwhile, despite the monetary and fiscal stimulus, economic activity is seen contracting provided current external demand conditions persist. The Bank will continue to carry monetary policy in a flexible manner to ensure financial stability.
The next meeting is scheduled for 8 June.