BAKU, Azerbaijan, September 4. The Monetary Policy Committee of the National Bank of Kazakhstan has decided to cut the base rate to 16.25% (from 16.75%) per annum, with a corridor of +/- 1 percentage point, the National Bank said.
The cut marks the third consecutive reduction in Kazakhstan's base rate. The National Bank lowered the rate to 17% on June 5, and to 16.75% on July 24.
"The decision is based on the results of the forecasting round, updated assessments of key macroeconomic indicators and the balance of inflation risks. In August this year, annual inflation slowed to 9.8%. The disinflationary process has continued for 11 consecutive months," the National Bank said.
According to the regulator, food inflation decreased to 9.5%, mainly due to a significant decline in fruit and vegetable prices, as well as lower import prices. Non-food inflation slowed to 11.4%, amid the strengthening of the tenge exchange rate.
Service inflation decreased to 8.9%, driven by a moderate slowdown in price growth for unregulated services.
Monthly inflation stood at 0.6% in August, unchanged from July. Seasonally adjusted monthly inflation accelerated to 0.9% from 0.7% in July, while core inflation remained at 0.7%.
The NBK said that inflation expectations of the population for the next 12 months decreased to 12.1% in July from 13.4% in June. The decline was attributed to reduced concerns over a possible increase in value-added tax, higher utility tariffs and food prices. At the same time, fuel price increases had a stronger influence on inflation expectations.
Inflation expectations among professional market participants for the end of 2026 remained at 10%.
The bank noted that the external environment remains unstable. The ongoing conflict in the Middle East is supporting high energy prices and increasing external inflationary pressures, according to the National Bank. Global food prices increased slightly due to higher grain and vegetable oil prices, while meat prices declined for the first time in a long period.
Meanwhile, Dutch banking group ING said yesterday that it does not rule out selective policy rate cuts in Kazakhstan, citing the resilience of the tenge and easing inflationary pressures. "FX resilience should allow selective policy rate cuts in Kazakhstan (from 16.75%) and Uzbekistan (from 14.00%)..." ING said.
