The Atyrau bridge in Kazakhstan

Kazakhstan Monetary Policy August 2023

Kazakhstan: NBK cuts rates for the first time since 2020 in August

At its meeting on 25 August, the National Bank of Kazakhstan (NBK) lowered its base rate to 16.50% from 16.75%. The cut was the first since 2020. Meanwhile, the interest rate corridor was maintained at plus or minus 1.0 percentage points.

The decision to decrease the rate was driven by the deceleration of annual inflation in July, following lower rises in food prices and the normalization of supply chains. Furthermore, inflation expectations decreased slightly in the same month. The rate cut came in spite of an improving outlook for the economy: The NBK increased its forecasts for GDP growth in 2024 and 2025, which can be attributed to consistent domestic demand, increased government expenditures and a recovery in the oil sector.

In line with its previous statements, the NBK provided explicit forward guidance, reiterating that the reduction in the base rate would persist if the trend of decreasing inflation continued. The Consensus is for interest rates to decrease later in the year.

The next meeting is scheduled for 6 October.

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