Central Bank stands pat again in June

Rates remain at some of the highest levels in recent history as expected: At its meeting on 5 June, the National Bank of Kazakhstan (NBK) decided to maintain the base rate at 16.50% and keep the interest rate corridor at plus or minus one percentage point. The hold matched April’s decision and came on the heels of a cumulative 225 basis point of hikes since late 2024. As a result, rates remain at some of their highest levels in recent decades and only slightly below the 2022–2023 peaks. The decision had been priced in by the markets.

Stubborn inflation and elevated global economic uncertainty keep the Bank on hold: The NBK opted to maintain a restrictive monetary policy stance due to sticky inflation and rising inflationary risks. Price pressures trended up at the outset of 2025, fanned by energy tariff hikes, sturdy consumer demand, fiscal stimulus, rising inflation expectations and elevated inflation in key trade partner Russia. As a result, policymakers hiked their end-2025 and 2026 inflation forecasts by 0.5 percentage points. In addition, the NBK raised its GDP growth forecast for 2025 due to stronger domestic demand and investment activity. The January reopening of the Tengiz oil field notably boosted capital outlays. Still, the Bank pointed to significant uncertainty regarding the economic outlook—particularly U.S. tariff policy and declining oil prices—which likely dissuaded it from hiking rates further in May.

Slight easing still on the horizon despite hawkish tilt: In its communiqué, the NBK struck a more hawkish tone than in past meetings, indicating that it is “highly probable” that it would stand pat through December, while leaving the door open for further policy tightening “if necessary”. Notably, the Bank highlighted that inflation risks had tilted to the upside due to unanchored inflation expectations, fiscal stimulus and second-round effects of a VAT hike earlier this year. Our panelists expect the Bank to kick off a monetary policy loosening cycle later this year. Still, some panelists see the Bank on hold or hiking rates. Our end-2025 Consensus interest rate forecast has been hiked by around 100 basis points since the NBK last met in April. The Bank will announce its next monetary policy decision on 11 July.

Panelist insight: Analysts at the EIU commented: “Uncertainty over the inflation outlook is heightened by global trade instability and the government's proposed 2026 tax reforms. Our baseline forecast is for the NBK to hold rates unchanged for a period and return to a mild easing stance from late 2025. However, there is a clear risk that resilient price pressures will delay this process or trigger further near-term tightening.” Goldman Sachs’ Basak Edizgil and Clemens Grafe were more hawkish: “The Committee stated that the risks have now become pro-inflationary from stronger domestic demand, higher external inflation, and elevated inflation expectations. The NBK emphasised that the current inflation dynamics require monetary policy to remain tighter for longer and guided towards stable rates until the end of 2025, as it is currently the case in our baseline.”

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