Kazakhstan's National Bank Cuts Base Rate to 15.75% — Fourth Consecutive Decrease

The National Bank of Kazakhstan lowered its base rate from 16.25% to 15.75% on October 23 — the fourth consecutive cut since June 2024.

Since October 2023, the rate had held at 18%. The regulator then reduced it to 17% in June, to 16.75% in July, and to 16.25% in September. In total, the rate has fallen by 2.25 percentage points.

Annual inflation slowed to 9.3% in September from 9.8% in August. Household inflation expectations declined from 12.1% to 11.8%. Food inflation stood at 8.5%, while non-food inflation reached 11%.

Despite positive momentum, inflation remains nearly twice the central bank's 5% target. The National Bank noted that tenge appreciation and relatively tight monetary policy have helped slow price growth.

National Bank Governor Timur Suleimenov stated that more sustainable disinflation is needed for further rate cuts. The regulator highlighted key risks: rising global energy and food prices, high government expenditures, and possible increases in regulated utility tariffs.

Kazakhstan's GDP grew 4.2% in January–September 2024, driven by construction, manufacturing, and transport. Investment in fixed capital increased by 7%, and non-commodity sector investment excluding budget funds rose by 25%. Real per-capita incomes in the second quarter grew just 0.7% year-on-year.

The National Bank aims to reduce inflation to 6.5–8.5% in 2025 and reach the 5% target by 2026. The next rate decision is scheduled for December 4.