The National Bank of the Republic of Kazakhstan has determined a new level of the base rate in the amount of 15.25% per annum. This decision was made to achieve the inflation target of 5%, which requires maintaining a moderately tight monetary policy, El.kz reports.
The Monetary Policy Committee of the National Bank of Kazakhstan set the base rate at 15.25% per annum, the bank's press service reports. At the same time, an interest corridor of +/- 1 percentage point has been set.
The National Bank said in a statement that external inflationary factors continue to have a positive impact against the backdrop of declining global food prices and restraining measures by central banks.
However, Kazakhstan's domestic economy is experiencing inflationary pressures due to stable domestic demand, reinforced by fiscal stimulus, as well as elevated and volatile inflation expectations.
The National Bank emphasizes that future changes in the base rate will depend on the compliance of the actual dynamics of inflation with the planned trajectory. To achieve the 5% inflation target, it is necessary to maintain moderately tight monetary conditions. The National Bank will continue to monitor the economic situation and, in the absence of external shocks, gradually reduce the base rate, possibly with periodic pauses. However, this downward cycle may take a long time.
Since December 6, 2022, the base rate in Kazakhstan has been 16.75%. In August 2023, it was reduced to 16.5%, in October to 16%, and in November to 15.75%. The next decision on the base rate will be announced on February 23 at 12:00 Astana time.