National Bank Keeps Key Rate Unchanged at 16.5%

The National Bank of Kazakhstan has decided to keep the key interest rate at 16.5%, according to a statement from its Monetary Policy Committee, Orda.kz reports.

The decision comes amid rising inflation, which hit 10% annually by the end of March. The main drivers are rising service prices, particularly due to higher-than-expected utility tariffs in the first quarter. Food inflation is also on the rise.

Still, the National Bank noted that "the first signs of stabilization have begun to appear."

In March, monthly inflation growth slowed to 1.3%, suggesting some easing of inflationary pressure. However, the Bank also acknowledged that inflation remains elevated overall, fueled by continued tariff hikes and external economic pressures.

Kazakhstan’s economy grew by 5.8% year-on-year from January to March, driven by strong activity in transport, construction, manufacturing, mining, and trade.

Pro-inflationary risks remain, primarily due to elevated inflation expectations, further increases in tariffs, price liberalization, and the anticipated rise in the tax burden,National Bank. 

The regulator continues to conduct gold and foreign exchange operations to curb inflation and has taken steps to cool the consumer lending market. The Bank will maintain a moderately tight monetary policy, with future rate decisions based on new data, including global risks such as U.S. tariff policy, and updated inflation forecasts.

The next decision on the key rate will be announced on June 5.

Original Author: Nikita Drobny