Base rate cut to 16.25 percent as inflation drops to 9.8 percent
The National Bank of Kazakhstan reduced its base rate by 50 basis points to 16.25 percent on September 22, 2026. The Monetary Policy Committee highlighted that annual inflation entered single digits at 9.8 percent while maintaining a moderately tight monetary stance.
Single-digit milestone reached
Annual inflation slowed for the eleventh consecutive month to 9.8 percent in August, entering single digits.
Food price growth moderated to 9.5 percent, while non-food inflation eased to 11.4 percent and services inflation declined to 8.9 percent.
The appreciation of the tenge lowered import costs, helping offset elevated fuel prices.
In parallel, one-year-ahead household inflation expectations dropped from 13.4 percent to 12.1 percent in July, while professional forecasts held at 10.0 percent.
Economic growth expanded 4.1 percent year-on-year in the first seven months of 2026, led by a 5.4 percent gain in the non-oil sector and a 7.7 percent increase in fixed capital investment.
Liquidity absorption and fiscal risks
The central bank revised its 2027 inflation forecast upward to 6.5–8.5 percent due to external pressures, tariff adjustments, and fiscal stimulus, while keeping the 2026 projection at 9–11 percent.
“Our goal is sustainable and stable inflation close to 5 percent in 2028,” the committee stated, emphasizing that scope for further easing remains limited.
Alongside the rate cut, the central bank completed the third stage of raising reserve requirements, absorbing up to 7 trillion tenge in excess liquidity.
Progress without victory
The rate cut acknowledges falling inflation but offers little room for a broader easing cycle.
Higher 2027 forecasts show that domestic fiscal pressures and tariff reforms remain uncontained.
Reaching the 5 percent target will require sustained monetary restraint over rapid cuts.