The Atyrau bridge in Kazakhstan

Kazakhstan Monetary Policy October 2019

Kazakhstan: Central Bank stands pat in October

At its latest monetary policy meeting on 28 October, the National Bank of Kazakhstan decided to leave 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, followed a 25-basis-point rate hike at the previous meeting in September.

Moderating price pressures, broadly stable inflation prospects and dynamic economic activity prompted the Bank’s decision to stay put. Inflation receded to 5.3% in September (August: 5.5%), closing in on the midpoint of the 4.0%–6.0% target corridor, while inflation expectations are estimated at 5.4% for the 12-month horizon. At the same time, domestic demand appeared to maintain a healthy pace of expansion in the third quarter, amid robust disposable income growth and upbeat investment activity.

Devoid of substantive forward guidance, the communiqué indicated only that future decisions will be guided by the Bank’s price projections, which currently see inflation landing on the midpoint of the 4.0%–6.0% target band during 2020. The Bank did, however, note that upside risks to the inflation outlook stem from an expected increase in marginal tariffs for certain types of regulated services.

The next meeting is scheduled for 9 December 2019.

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