The Atyrau bridge in Kazakhstan

Kazakhstan Monetary Policy December 2019

Kazakhstan: Central Bank stands pat in December

At its latest monetary policy meeting on 9 December, the National Bank of Kazakhstan left the base rate at 9.25%, keeping an interest rate corridor of plus or minus 1.0 percentage point. The decision, which was in line with analysts’ expectations, is the second consecutive time the Bank has held the base rate steady since delivering a 25-basis-point rate hike in September.

Easing prices pressures and strong economic growth in the quarter drove the Bank’s decision to stay put in December. Inflation edged down to 5.4% in November (October: 5.5%), closing in to the midpoint of the 4.0%–6.0% target corridor, as a slowdown in the growth of prices for non-food items and services compensated faster increasing prices for food. Economic growth, meanwhile, sustained a strong pace of expansion in January–October, with upbeat wage growth fueling household spending.

Looking ahead, inflation is expected to end 2020 within the target corridor, although a temporary spike in Q1 2020 is possible owing to the increase in regulated tariffs for paid services and higher food inflation. Meanwhile, economic growth is projected to ease somewhat next year; however, it should remain robust nonetheless thanks to resilient household spending and capital investment, as well as due to a pick-up in exports prompted by increased oil and gas condensate production.

The next meeting is scheduled for 3 February 2020.

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