The Monetary Policy Committee of the National Bank of the Republic of Kazakhstan has made a decision to reduce the base rate to the level of 16% per annum with the interest rate corridor of +/– 1 percentage point, El.kz cites the National Bank’s press service.
As the Bank’s statement reads, the annual inflation is gradually slowing down. External inflationary pressures are gradually decreasing amid central banks' restraining policies and reduced global food prices.
“However, there are individual factors and risks that require attention. Internal inflation factors include fiscal stimulus, stable domestic demand, and high inflation expectations. Risks of secondary round effects from the increase in regulated prices have increased, which were previously offset by the dynamics of the tenge exchange rate,” says the National Bank.
Given the current decision and risk balance, the possibility of further lowering the base rate in 2023 is significantly constrained.
“Monetary policy easing until the end of the year will be considered if there is a slowdown in annual inflation to a one-digit level,” the Bank notes.