ASTANA, Kazakhstan, November 22. The IMF has recommended that Kazakhstan not ease monetary policy prematurely, says the IMF statement following a mission to the country from November 7–21, Trend reports.
Kazakhstan, according to the statement, must implement cautious monetary policy in the face of persistent inflationary pressures.
However, as observed by the IMF, inflation is significantly above the National Bank of Kazakhstan's five percent objective, inflation expectations are high, the near-term economic outlook is uncertain, and domestic energy and utility costs are expected to climb in the coming months.
"Given these factors, monetary policy should not be eased prematurely, that is, before inflation is close to target and inflation expectations are well anchored," the statement said.
At the same time, the IMF believes that the efficacy and credibility of monetary policy can be reinforced further, especially by boosting the independence of the National Bank of Kazakhstan (NBK).
The NBK recently increased monetary policy transparency by better communicating its choices and issuing quarterly inflation predictions.
The IMF believes that eliminating NBK's quasi-fiscal actions (e.g., subsidized loans) will strengthen its credibility in conducting monetary policy.
