Photo: National Bank of Kazakhstan
ASTANA, Kazakhstan, October 10. The Monetary Policy Committee of the National Bank of Kazakhstan has decided to raise the benchmark interest rate from 16.5 percent to 18 percent, Trend reports via the bank.
The bank has raised its base interest rate in response to accelerating inflation, signs of demand outpacing supply, and active fiscal measures, aiming to stabilize price dynamics and prevent the formation of an inflationary spiral.
Annual inflation accelerated to 12.9 percent in September (up from 12.2 percent in August), exceeding the National Bank’s forecast. Food prices remain the main driver, rising 12.7 percent, with some categories increasing faster due to higher production and import costs. Service inflation also contributes significantly at 15.3 percent, driven by both regulated (30.4 percent) and market services. Non-food inflation accelerated to 10.8 percent, with fuel prices rising 11.9 percent over the year, including a 3.4 percent increase in September.
Monthly inflation rose to 1.1 percent in September, up from 1.0 percent in August. Core and seasonally adjusted inflation increased to 1.2 percent and 1.3 percent, respectively, indicating a persistent inflationary trend and the gradual emergence of secondary effects in pricing.
Household inflation expectations remain elevated and volatile over the 12-month horizon. Professional market participants have raised their 2025 inflation forecasts from 11.3 percent to 12 percent.
External inflationary pressures persist, particularly from global food markets, where record-high price growth has been observed for meat and vegetable oils. Rising export activity further fuels domestic price increases. Inflation in Russia remains relatively high but shows signs of slowing, while in the EU it remains stable. The ECB continues to pause, maintaining rates amid uncertainty, and the US Federal Reserve has begun easing rates to support employment amid moderate inflationary pressures.
Economic growth in Kazakhstan accelerated to 6.5 percent year-on-year in January–August 2025, compared with 3.7 percent in the same period of 2024. Growth was strongest in transport and warehousing (+21.5 percent), construction (+18.1 percent), trade (+8.9 percent), and in mining (+9.6 percent) and manufacturing (+6.5 percent).
The National Bank noted that inflationary pressures are primarily driven by strong domestic demand, secondary effects from tariff reforms, fuel market liberalization, and tax changes, including VAT adjustments. The rapid inflation acceleration, high expectations, and weakening real effective exchange rate have eased overall monetary conditions and caused inflation to deviate from the projected downward path.
Alongside the base rate hike, the central bank continues measures such as mirroring foreign exchange operations, reviewing minimum reserve requirements, and introducing micro- and macroprudential restrictions to stabilize inflation, support tenge-denominated assets, and prevent an inflationary spiral.
In March 2025, the National Bank increased the base rate from 15.25 percent to 16.5 percent.
The Monetary Policy Committee (MPC) is the main decision-making body of the National Bank of Kazakhstan (NBK) responsible for determining monetary and exchange rate policies, including setting the base rate and interest rates for key monetary operations. The MPC aims to control inflation through its monetary policy instruments and forecasts, with its decisions serving as recommendations to the NBK Governor for final approval.
Stay up-to-date with more news on Trend News Agency’s WhatsApp channel
