13 Oct 2009 17:02

Head of National Bank of Kazakhstan still sees no need in lowering refinancing rate

ALMATY. Oct 13 (Interfax) - The head of the National Bank of Kazakhstan, Grigory Marchenko, believes the refinancing rate does not need to be lowered in the near future.

"So far we see no need to reduce the refinancing rate. When one looks at the figure, then inflation in November, December 2008 and January 2009 was very low. It cannot be forecast that inflation next November, December and January, will also be low," he said at a press conference in Almaty on Tuesday.

He added that in the period February-April 2009, average monthly inflation was quite high. According to Marchenko, a drop in annual inflation could be posted during these months next year.

"Then if November, December and January go by successfully we can move further and lower the refinancing rate," he said.

The National Bank is holding to the position that the refinancing rate should be positive in real terms and be set over the rate of inflation. Since inflation is dropping the rate also decreases.

As of September 4, the National Bank lowered the refinancing rate to 7%. Prior to this, the refinancing rate stood at 7.5% after being lowered from 8% on August 10.

It was earlier reported that the inflation in annual terms for September 2009 (against September 2008) slowed to 6%, which was its lowest rate since September 2003 (in December 2008 - 9.5%). This inflation rate was three times below the maximum posting over the last several years in the summer months of 2008.

Average annual inflation in September 2009

The National Bank of Kazakhstan forecasts inflation in annual terms at 8%-8.5%.