NBK may pause rate cuts after June reduction to 13.5%
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The National Bank of Kazakhstan cut its base rate by 50 basis points to 13.5% on June 12, the second reduction this year. The decision came as inflation slowed to 8.5% in May, but the central bank signaled it may hold rates steady in the coming months. Analysts expect the NBK to wait for clearer inflation trends before further easing.
Rate Decision
The National Bank of Kazakhstan on June 12 lowered the base rate by 50 basis points to 13.5%, in line with market expectations. This follows a similar cut in April, bringing the cumulative reduction to 100 bps since the start of 2026. The decision was unanimous, according to the central bank's statement.
Inflation Outlook
Annual inflation eased to 8.5% in May, down from 9.2% in April, driven by slower food price growth. Core inflation, which excludes volatile items, stood at 8.1%. The NBK projects inflation to reach 6-8% by end-2026, but risks remain from fiscal spending and external price pressures.
Pause Signal
NBK Governor Timur Suleimenov indicated that the bank may hold the rate steady at its next meeting in July, citing uncertainty about inflation persistence. The central bank's statement noted that pro-inflationary factors, including budget expansion and rising wages, could delay further easing. Market participants now see a 60% probability of a hold in July, according to a Bloomberg survey.
What's Next
The NBK's next rate decision is scheduled for July 24. It remains unclear whether the bank will resume cuts later in 2026, as inflation risks from fiscal stimulus and global commodity prices persist.
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NBK may pause rate cuts after June reduction to 13.5%
