Kazakhstan's central bank cut its base rate to 17 percent, the National Bank of Kazakhstan announced on 5 June, lowering the rate by 100 basis points from 18 percent after annual inflation slowed to 10.4 percent in May. The bank said moderately tight monetary conditions were still needed to bring inflation into single digits this year.
POLICY ACTION AND IMMEDIATE EFFECT
The base rate was set at 17 percent with a corridor of plus or minus 1 percentage point, or 16 to 18 percent. The National Bank said the slowdown in inflation achieved so far, together with an improved forecast, had created room to reduce the base rate at this meeting.
The National Bank revised its 2026 inflation forecast down to 9–11 percent from 9.5–11.5 percent, citing a faster-than-expected decline in inflation, limited pass-through from the VAT increase to consumer prices and a stronger tenge.
OUTLOOK
It projected inflation of 5.5–7.5 percent in 2027 and expected it to stabilise close to the 5 percent target in 2028, while saying the balance of risks to inflation remained tilted to the upside.
The National Bank said further decisions would depend on incoming inflation data, domestic demand, the execution of fiscal parameters and the scale of quasi-fiscal stimulus. The next base rate decision is scheduled for 24 July.
Sources: National Bank of Kazakhstan; The Astana Times
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