The Atyrau bridge in Kazakhstan

Kazakhstan Monetary Policy February 2024

Kazakhstan: NBK cuts policy rate once again in February

On 23 February, the National Bank of Kazakhstan (NBK) reduced its policy rate by 50 basis points to 14.75% and maintained the interest rate corridor at plus or minus 1.0 percentage point. The decision mirrored January’s same-sized cut; as a result, rates have now been cut by a cumulative 200 basis points since August 2023.

At the outset of 2024, inflation fell to an almost two-year low on the back of the Bank’s restrictive monetary policy stance, a high base effect and cooling external price pressures. Moreover, the NBK noted that inflation expectations decreased for the third straight month in January. Against this backdrop, the Bank opted to continue its easing cycle; however, it highlighted several upside risks to the inflationary outlook, including stronger fiscal stimulus, unanchored inflation expectations and additional sanctions on key trade partners.

Regarding activity, the NBK raised its GDP growth forecast for 2024 to 3.5–4.5%, while leaving its forecast for 2025 unchanged at 5.5–6.5%. These forecasts provided the Bank with further room to cut rates.

In its communiqué, the NBK was more hawkish than in January, expressing “a high probability of retention of the base rate at its current level in the nearest decisions.” The Bank reiterated its commitment to drive inflation towards the 5.0% target. That said, a majority of our panelists still expect the easing cycle to continue this year, and our Consensus is for about 225 basis points of additional cuts by the end of the year.

The next meeting is set for 12 April.

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