The National Bank of Kazakhstan has decided to lower the base rate by 25 basis points to 16.5% with a corridor of plus or minus 1 percentage point, as reported by the regulator's press service, media reports.
While most analysts surveyed by Interfax predicted a decline by 50 basis points to 16.25%, the National Bank explains that the pro-inflationary pressure from the external environment continues to weaken gradually.
Although inflation in most countries is slowing down as a result of the policy of central banks to ensure price stability, it remains stable, leading to a shift in the timing of rate cuts in developed countries.
However, prices in the world food markets, as well as logistics costs are decreasing. Despite this, the pro-inflationary pressure remains in the economy of Kazakhstan, with expanding fiscal stimulus, stable domestic demand, high and unstable inflation expectations, and rising production costs.
The National Bank emphasizes that the space for reduction is limited by the risks of a potential acceleration of fiscal stimulus in the second half of the year. The next planned decision of the Monetary Policy Committee of the National Bank on the base rate will be announced on October 6.
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