FX.co ★ Kazakhstan Holds Key Rate in August

The National Bank of Kazakhstan opted to maintain its benchmark interest rate steady at 16.5% as of August 29, 2025, continuing its tight monetary policy in light of ongoing inflation concerns. Annual inflation was recorded at 11.8% in July, with food prices emerging as the primary inflationary factor due to a slowdown in service inflation. Meanwhile, although monthly inflation decreased to 0.7%, it remained above the average. Inflation expectations have risen to 14.2%, driven by factors such as tariff reforms, fiscal stimulus, robust demand, and swift lending growth. In response to these dynamics, the Bank has adjusted its 2025 inflation forecast to a range of 11–12.5% and has upgraded its GDP growth projection to 5.5–6.5%, bolstered by strong investment and consumer spending. To support disinflation efforts, new reserve requirements will be implemented in September, along with stricter credit regulations. Policymakers emphasized the importance of maintaining a restrictive policy stance as crucial for guiding inflation towards the 5% target, while leaving room for additional rate hikes should inflation risks intensify. The next monetary policy decision is scheduled for October 10.