National Bank of Kazakhstan hikes base rate to 15.25% pa, analysts had expected retention

ALMATY. Nov 29 (Interfax) - The monetary policy committee of the National Bank of Kazakhstan has decided to hike the base rate, or prime rate, to 15.25% per annum, with a corridor of +/- 1 percentage point, the regulator's press service said.

"This decision was based on updated forecasts and an assessment of inflation risks. [...] Monetary conditions have eased overall amid a weakened exchange rate, lower real interest rates driven by rising inflation, and higher inflation projections for the upcoming years. Additionally, increased volatility in financial markets render it necessary to raise the base rate," the National Bank said.

The National Bank further explained that it would closely monitor the need to tighten monetary policy going forward, given the volatility in financial and energy markets, in order to bring inflation back to steady reduction to achieve the target of 5%.

The majority of analysts surveyed earlier by Interfax had forecast that the regulator would retain the rate at 14.25% pa, which had been the case since mid-July.

The National Bank of Kazakhstan has cut the base rate four times since the beginning of the year, first by 50 basis points to 15.25% pa in January, then by another 50 bps to 14.75% pa in February, by 25 bps to 14.5% pa in May, and by another 25 bps to 14.25% pa in July. The National Bank had retained the rate since its July meeting.

The monetary policy committee of the National Bank of Kazakhstan plans to announce its next scheduled decision on the base rate on January 17, 2025.