Kazakhstan Cuts Base Rate to 16.75% as Inflation Pressure Persists
The 25-basis-point reduction follows a ninth straight monthly decline in annual inflation, but household expectations and underlying price pressures remain elevated.
Kazakhstan’s National Bank lowered its base rate to 16.75% on July 24 as annual inflation eased for a ninth straight month, while rising expectations kept monetary policy moderately tight.
The 25-basis-point cut reduced the rate from 17% and set the interest-rate corridor at 15.75% to 17.75%. The base rate had stayed at 18% through April before being reduced to 17% in June.
Annual inflation fell to 10.3% in June from 10.4% in May. Food prices rose 10.4% from a year earlier, while nonfood prices increased 11.7% and services prices rose 9.0%.
Monthly inflation was 0.8% in June. The median of seasonally adjusted core-inflation measures was 0.9%, indicating that price pressure remained broad despite the decline in the annual rate.
Household inflation expectations increased to 13.4% in June from 12.7% in May. Professional market participants expected inflation to reach 10.0% in 2026 and 7.8% in 2027.
“The Monetary Policy Committee of the National Bank has decided to reduce the base rate by 25 basis points to 16.75%,” National Bank Governor Timur M. Suleimenov said.
The central bank said elevated underlying price pressures and inflation expectations justified maintaining a moderately tight policy stance. Suleimenov said the bank does not follow a predetermined path for the base rate.
Future decisions will depend on inflation data, fiscal-policy implementation, quasi-fiscal stimulus, regulated-tariff adjustments and global fuel and commodity markets.
Kazakhstan’s economy grew 4.1% year over year during the first half of 2026. Growth excluding mining was about 5.3%, while fixed-capital investment increased 9.6%.
The National Bank’s medium-term inflation target is 5%.
