Kazakhstan’s National Bank has raised its key interest rate to 16.5% to address rising inflation, which hit 9.4% in February. The inflation forecast has been adjusted, expecting rates of 10-12% in 2025 and 5.5-7.5% by 2027. The next rate decision will be made on April 11, 2025.
On March 7, the National Bank of Kazakhstan enhanced its key interest rate to 16.5%, as reported by Trend. This decision was made by the Monetary Policy Committee based on a thorough analysis of current data and inflation risks, implementing a base rate corridor of +/- 1 percentage point. The action aims to combat high inflation levels, which are significantly impacted by soft monetary conditions.
In February, annual inflation surged to 9.4%, with service prices contributing the most to this increase. The monthly inflation rate showed substantial growth, surpassing historical averages. Core inflation figures reached 14.2%, while seasonally adjusted inflation stood at 16.9%, indicating strong internal demand amid ongoing fiscal stimulus and excessive consumer lending expansion, projected at 33.5% year-on-year by 2024.
The National Bank anticipates Brent crude oil prices will stabilize at approximately $70 per barrel through the forecast period, a condition informed by price dynamics and market demand-supply imbalances. The inflation projections have been updated, predicting rates of 10-12% in 2025, and 9-11% in 2026, with expectations to reduce to 5.5-7.5% by the end of 2027 due to tighter monetary policy and diminished fiscal stimulus from planned tax reforms.
The upcoming decision regarding the interest rate is expected on April 11, 2025, highlighting the National Bank’s commitment to addressing inflationary pressures effectively.
Kazakhstan’s National Bank has proactively increased its key interest rate to curb rising inflation, which reached 9.4% in February. The adjustments in monetary policy are essential to manage internal demand pressures and anticipated inflation rates in the coming years. The Bank forecasts a gradual reduction in inflation through effective fiscal measures and planned tax reforms, with the next interest rate decision on April 11, 2025.
Original Source: en.trend.az
