Central Bank of Kazakhstan Cuts Rates Again

The National Bank of Kazakhstan lowered its base rate by 25bps to 16.75% at its July 2026 meeting, surprising markets that had widely expected policymakers to leave borrowing costs unchanged. The decision followed June's surprise 100bps cut, as annual inflation eased for a ninth consecutive month to 10.3% in June. Policymakers said disinflation continued to be supported by tight monetary policy, a stronger tenge, moderating consumer demand, and government anti-inflation measures, although recent monthly inflation data suggested the slowdown in price pressures may be losing momentum. The central bank also highlighted resilient economic activity, with GDP expanding 4.1% in the first half of 2026, supported by strong growth in construction, manufacturing, transportation, and investment. Despite the rate cut, policymakers reiterated that inflation risks remain tilted to the upside and emphasized that future policy decisions will remain data-dependent.

The Central Bank of Kazakhstan lowered its key policy rate by 100bps to 17% at its June 2026 meeting, marking the first reduction in borrowing costs since mid-2024 and surprising markets, which had broadly expected rates to remain unchanged. Policymakers noted that inflation continued to ease, slowing to 10.4% in May. The central bank revised its 2026 inflation forecast downward to 9–11% from 9.5–11.5%, due to a faster-than-expected deceleration in price growth, the limited pass-through of the VAT increase to consumer prices, and the appreciation of the tenge. Inflation is now projected to slow further to 5.5–7.5% in 2027 and converge to the central bank's 5% target in 2028. Meanwhile, the GDP growth forecast for 2026 was upgraded to 4.5–5.5%. Despite the rate cut, policymakers emphasized that monetary conditions must remain moderately restrictive to ensure inflation falls into single digits this year and returns to the medium-term target

The National Bank of Kazakhstan kept its benchmark interest rate unchanged at 18% on April 24, 2026, maintaining a tight policy stance as inflation remained elevated despite continued disinflation. Annual inflation slowed to 11% in March from 11.7% in February, while monthly inflation moderated to 0.6% from 1.1%, supported by restrictive monetary conditions, a stronger tenge, slower consumer lending, and government anti-inflation measures. Still, the central bank noted inflation pressures remain above its 5% target, while inflation expectations stayed high at 14.6%. The prolonged Middle East conflict also raised concerns over higher global prices for energy, food, and fertilizers. The economy grew 3% in the first quarter, supported by strong activity in construction, transport, manufacturing, and trade. While policymakers signaled openness to considering rate cuts in future decisions if current trends hold, they stressed that more evidence of sustainable disinflation is needed.