Kazakhstan’s National Bank has raised its key interest rate to 16.5 percent to address rising inflation, which reached 9.4 percent in February. The central bank’s strategies include monitoring market dynamics and implementing fiscal reforms. The inflation forecast for 2025 predicts rates between 10-12 percent, with a gradual decrease expected through 2027.
The National Bank of Kazakhstan has announced an increase in its key interest rate to 16.5 percent per annum, with a corridor of +/- 1 percentage point. This decision was reached by the Monetary Policy Committee after thorough analysis of current economic data, updated forecasts, and evaluations of inflation risks. The central bank responded to significantly softened monetary and credit conditions, necessitating strong measures to avert a potential inflationary spiral.
As reported, annual inflation surged to 9.4 percent in February, driven by escalating prices across various sectors, particularly in services. Monthly inflation showed a notable spike that exceeded historical averages. Current core and seasonally adjusted inflation rates stood at 14.2 percent and 16.9 percent, respectively. Additionally, inflation expectations among the populace rose to 13.7 percent in February, indicating heightened demand pressures coupled with fiscal stimulus and increased consumer lending.
The National Bank projects that Brent crude oil prices will stabilize at approximately $70 per barrel throughout the forecast period, based on actual market dynamics and an anticipated oversupply. Consequently, inflation forecasts have been adjusted, predicting rates of 10-12 percent for 2025, declining to 9-11 percent in 2026, and further down to 5.5-7.5 percent by the close of 2027, as a result of stringent monetary policies and reduced fiscal stimulus stemming from tax reforms.
The next disclosure concerning the interest rate decision is slated for April 11, 2025.
In conclusion, the National Bank of Kazakhstan’s recent decision to elevate the key interest rate aims to combat rising inflation, which reached 9.4 percent in February. The adjustments in inflation projections reflect a broader economic strategy to mitigate excess demand and stabilize prices in the upcoming years. By maintaining vigilant oversight through forthcoming monetary policies, the central bank seeks to foster economic stability amidst fluctuating oil prices and an expanding fiscal landscape.
Original Source: en.trend.az
