The National Bank of Kazakhstan has lowered its benchmark base interest rate from 16.75 percent to 16.25 percent per annum, continuing a monetary policy easing cycle as annual inflation slowed to single digits.
The central bank's Monetary Policy Committee established an interest rate corridor of plus or minus one percentage point around the new rate. The decision marks the third consecutive rate reduction by the financial regulator of the Central Asian nation as domestic price pressures continue to ease.
At its previous meeting, the central bank reduced the base rate from 17 percent to 16.75 percent. That decision followed an earlier rate cut from 18 percent to 17 percent, establishing a progressive reduction in official borrowing costs.
As the central bank of Kazakhstan, the National Bank manages monetary policy, regulates the banking system, and oversees currency stability. The base rate serves as its chief policy instrument to guide interest rates across commercial banks and manage inflation within the national economy.
Slowing inflation and economic expectations
Official data released alongside the decision showed annual inflation in Kazakhstan slowed to 9.8 percent in August, down from 10.2 percent in July. The deceleration marks the first time in a year and a half that consumer price inflation in the country has fallen below the 10 percent threshold.
Inflation expectations among citizens and businesses also registered a significant decline, falling to 12.1 percent. Monetary policy officials noted that the disinflationary process across the Kazakh economy has now sustained momentum for 11 consecutive months.
Kazakhstan, Central Asia's largest economy, has faced persistent inflationary challenges following global trade disruptions and regional economic adjustments. Central banks typically utilize rate cuts to support economic growth once price increases move toward manageable levels.
Policy impact and future inflation target
National Bank Governor Timur Suleimenov stated that reducing inflation to single digits represents an important achievement for the economy. He said the monetary policy implemented by the central bank, alongside measures taken in coordination with the Kazakh government, successfully guided the national economy back onto a disinflationary path.
However, Suleimenov warned that pro-inflationary risks remain significant both internally within the domestic market and externally from global factors. He emphasized that policymakers must maintain efforts to drive inflation down further toward the central bank's medium-term target level of 5 percent, where price growth is intended to stabilize.
