Kazakhstan Interest Rate

National Bank of Kazakhstan cuts base rate in July

NBK surprises markets with another cut: At its meeting on 24 July, the National Bank of Kazakhstan (NBK) continued its easing cycle—unexpectedly started at June’s meeting with a 100 basis point cut—lowering the base rate by 25 basis points to 16.75%. The decision again came as a surprise for the markets, though this time to a lesser degree given the smaller-sized cut.

Sustained decline in inflation backs the cut: The Central Bank's decision was primarily driven by a sustained decline in inflation, which had fallen for nine consecutive months through June. Regulated utility prices—which had been the Bank’s primary concern in previous meetings due to the liberalization of utility tariffs—also declined in annual terms in June. Moreover, the NBK has announced an agreement with the state-owned Baiterek Holding to direct its financing mainly toward investment projects, thereby reducing the impact of this stimulus on consumer demand and, consequently, on upside inflationary pressures.

Further easing hinges on declining inflation: The Central Bank said that the future path of the base rate will be data-dependent, but highlighted the need for a tight monetary stance to bring inflation to its 5.0% target. Meanwhile, following the meeting, Governor Suleimenov said that inflation would need to decline to 9.0–9.5% for the policy rate to be reduced to 16.00%. Most of our panelists expect the base rate to reach that level by the end of this year, though the Consensus Forecast for inflation in December suggests upside risks to this projection.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Kazakhstani interest rate projections for the next ten years from a panel of 12 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Kazakhstani interest rate.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Kazakhstani interest rate projections.

Want to get access to the full dataset of Kazakhstani interest rate forecasts? Send an email to info@focus-economics.com.