Kazakhstan Monetary Policy July 2019


Kazakhstan: Central Bank stays put in July

July 15, 2019

At its latest monetary policy meeting on 15 July, the National Bank of Kazakhstan held the base rate at 9.00%, with an interest rate corridor of plus or minus 1.0 percentage point.

Within-target inflation and relatively low inflation expectations prompted the Bank to stay put. Inflation ticked up to 5.4% in June from 5.3% in May, largely reflecting a faster increase in food costs. In addition, upside risks to inflation stemming from volatile commodity prices and buoyant domestic demand limited the room for a rate cut, despite growth dynamics showing signs of weakness in the second quarter.

The communiqué was devoid of substantive forward guidance and only indicated that future decisions will be guided by the Bank’s inflation projections, which currently see inflation hovering around the upper bound of the 4.0%–6.0% target band. The Bank did, however, note that a global slowdown poses upside risks to the inflation outlook. FocusEconomics panelists see the rate being slashed again before year-end, in line with the easing trend seen in the world’s largest economies.

The next meeting is scheduled for 9 September 2019.

FocusEconomics panelists see the base rate ending 2019 at 8.83%. Looking ahead, the Central Bank is expected to continue trimming the interest rate, and our panelists see the rate ending 2020 at 8.35%.

Author:, Economist

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