The National Bank of Kazakhstan announced its decision to maintain the base rate at 16.75% during its meeting on July 5, marking the fifth consecutive time the rate has been kept unchanged since December of the previous year.
In a report released by the bank, it stated that the overall risk balance continues to be weakly biased towards disinflationary factors, primarily due to easing pressure from the external sector. However, the modest deceleration of core inflation and rising inflation expectations have prompted a cautious approach to implementing monetary policy.
Galymzhan Pirmatov, Chairman of the National Bank, outlined several factors that influenced the decision to keep the base rate steady. These factors include the dynamics of inflation and inflation expectations, trends in the domestic economy, and foreign economic conditions. The primary objective remains to achieve a consistent reduction in inflation.
Pirmatov emphasized that although positive shifts in inflationary processes have been observed and are expected to continue, it is premature to conclude that a confident and stable trend of lower inflation has been established. Internal pro-inflationary factors and potential risks of price growth in the future still persist, necessitating a cautious monetary policy stance.
The National Bank of Kazakhstan will reconvene to review the base rate on August 25, allowing for further assessment of economic indicators and inflationary pressures before making any adjustments.
The decision to maintain the base rate at 16.75% underscores the National Bank's commitment to managing inflationary risks and ensuring price stability in the Kazakh economy. By keeping a cautious approach and closely monitoring economic developments, the bank aims to create a favorable environment for sustainable economic growth in the country.
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