Kazakhstan Hikes Key Rate to 18% in October

The National Bank of Kazakhstan left its benchmark interest rate unchanged at 18% on January 23, 2026, in line with market expectations, citing persistently high inflation and strong domestic demand. Headline inflation reached 12.3% at the end of 2025, in line with the central bank's forecasts, largely driven by food prices, while monthly inflation rose 0.9% in December and core inflation remained elevated. Inflation expectations increased, with households projecting 14.7% over the next year and market participants anticipating 10.8% for 2026. While a stronger tenge and tighter financial conditions have supported disinflation, upside risks linger, including the effects of fuel price liberalization, tariff reforms, tax changes, and the planned quasi-fiscal stimulus. The central bank indicated the policy rate is likely to stay at its current level through the first half of 2026. The next rate decision is due on March 6, 2026.

The National Bank of Kazakhstan kept its benchmark interest rate unchanged at 18% on November 28, 2025, after a record 150-basis-point hike in October aimed at containing persistent inflation. The central bank indicated that rate cuts are unlikely before mid-2026, while further tightening could be considered if price pressures fail to ease. Annual inflation eased slightly in October but remained well above the 5% target, supported by fiscal stimulus, rising regulated prices, and supply constraints. Elevated inflation expectations prompted the government to complement monetary policy with price freezes on fuel and utilities and a 2026–2028 program aimed at curbing inflation, reducing import dependence, and supporting growth. GDP growth is now projected at 3.5–4.5% in 2026. Meanwhile, the tenge has strengthened nearly 5% against the dollar since the last rate decision, aided by oil fund currency sales. The central bank’s next policy meeting is scheduled for January 23, 2026.

The National Bank of Kazakhstan raised its benchmark interest rate to 18% on October 10, 2025, as inflation pressures intensified amid robust demand and loose monetary conditions. Inflation has increased across all key metrics, with annual inflation accelerating to 12.9% in September from 12.2% in August, exceeding forecasts as food and service prices surged on higher production and import costs. Non-food inflation also rose to 10.8%, reflecting continued fuel price liberalization, while inflation expectations climbed to 12%, signaling lingering uncertainty. Strong domestic demand, fiscal expansion, and rapid credit growth further strained supply capacity, with additional pro-inflationary risks from tax and tariff reforms. With GDP growth accelerating to 6.5% in January–August, driven by construction, trade, and industry, the central bank opted for a decisive tightening step to stabilize expectations and preserve tenge assets. The next rate decision is due November 28.