National Bank of Kazakhstan Cuts Base Rate to 16.25%

The National Bank of Kazakhstan has lowered its base rate from 16.75% to 16.25% per annum, maintaining the interest rate corridor at ±1 percentage point.

According to the central bank's Monetary Policy Committee, the decision was driven by slowing inflation and updated macroeconomic forecasts. Annual inflation in August eased to 9.8%, with price growth slowing across key sectors: food inflation fell to 9.5%, non-food products to 11.4%, and services to 8.9%. Monthly inflation stood at 0.6%.

Public inflation expectations for the year ahead also improved, dropping from 13.4% in June to 12.1% in July, while market analysts project year-end inflation at around 10%.

Looking ahead, the regulator kept its 2026 inflation forecast unchanged at 9–11%. However, the outlook for 2027 was revised upward to 6.5–8.5% (from 5.5–7.5%) due to external inflationary pressures, adjusted regulated price forecasts, and increased fiscal spending. Inflation is expected to approach the target 5% benchmark by 2028.

While positive inflation trends allowed for this rate cut, the National Bank cautioned that room for further monetary easing remains limited due to lingering upside risks. The next policy rate decision will be announced on October 23.