The National Bank of Kazakhstan raised its base rate from 15.25% to 16.5% due to economic uncertainties. Analyst Rassul Rysmambetov highlighted concerns over rising tariffs, a VAT increase, and economic deregulation. These factors could contribute to inflation, necessitating this preemptive action.
The National Bank of Kazakhstan (NBK) has raised its base interest rate by 1.25 percentage points, moving from 15.25% to 16.5%. This decision, made in response to increasing economic uncertainty, has been described by financial analyst Rassul Rysmambetov as a proactive measure. He expressed concerns over rising tariffs, an anticipated VAT increase, and economic deregulation, all of which may contribute to inflationary pressures.
Rysmambetov identified three primary influences behind this decision. Firstly, changes in U.S. policy under the previous administration could negatively affect Kazakhstan’s economy, particularly in terms of budgetary and inflation forecasts. Secondly, a decree signed by President Kassym-Jomart Tokayev last May aimed at economic liberalization is indicative of a broader trend toward deregulating prices and tariffs. Thirdly, proposals to increase VAT have further exacerbated inflation expectations.
Rysmambetov commented, “If there had not been such an active attack on oil and inflation expectations related to VAT, the situation could have been much more stable.” Furthermore, he emphasized that the current global economic landscape is unpredictable. He stated, “The tariff war between the US, Europe, Canada, Mexico, and China is a global change that we feel as part of the global economy,” highlighting the potential repercussions for Kazakhstan as an oil-exporting nation. He suggested the necessity to reassess strategic plans in light of these developments.
In summary, the National Bank of Kazakhstan’s decision to raise interest rates is a strategic response to significant inflation risks driven by both domestic and international factors. Analyst Rassul Rysmambetov underscores the urgency of this move, given the broader implications of global trade tensions and government policy shifts. As Kazakhstan navigates these economic challenges, monitoring inflationary pressures and tariff implications will be essential for fiscal stability.
Original Source: astanatimes.com
