Kazakhstan makes a surprise rate cut, with next move to depend on the tenge
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COMMONWEALTH OF INDEPENDENT STATES: Kazakhstan’s central bank cut the base rate by 100bp to 17.00%, surprising the market with an earlier and bolder move than we expected. Softer CPI, lower inflation expectations and supportive portfolio flows opened room for easing. Follow-up cu
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4 itemsKazakhstan makes a surprise rate cut, with next move to depend on the tenge
Kazakhstan makes a front-loaded cut to 16.25%, as window for further easing narrows
The decision by the National Bank of Kazakhstan (NBK) to cut the base rate by 50 basis points to 16.25% marks a notable shift but reflects cautious optimism regarding inflation dynamics. With the annual CPI easing to 9.8% in August and households' inflation expectations declining, the NBK acted sooner than anticipated. However, as per the full note from ING, the central bank explicitly cautioned against further cuts in light of rising external inflation pressures and a higher inflation forecast for 2027, revising it to 6.5-8.5% from 5.5-7.5%.