NBK signals rate pause after cutting to 13.5%
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The National Bank of Kazakhstan cut its base rate by 100 basis points to 13.5% on June 12, the first reduction in 2025. Governor Timur Suleimenov indicated the bank may hold rates steady for the rest of the year amid persistent inflation risks.
The Rate Decision
The National Bank of Kazakhstan cut its base rate by 100 basis points to 13.5% on June 12, the first reduction since December 2024. The decision was widely expected by analysts, with 10 of 12 economists polled by Reuters forecasting the move. The bank cited easing inflation pressures, with annual inflation slowing to 7.5% in May from 8.2% in April.
Pause Signal
Governor Timur Suleimenov said at a press conference that the bank is likely to hold rates steady for the remainder of 2026, barring a sharp change in inflation dynamics. He noted that core inflation remains elevated at 8.1% and that fiscal stimulus from the government's infrastructure spending could reignite price pressures. The bank's next rate decision is scheduled for August 28.
Market Reaction
The tenge weakened 0.3% against the dollar following the announcement, trading at 465.5 per dollar. The KASE index rose 0.8% on the day, led by banking stocks. Analysts at Halyk Finance said the pause signal was more dovish than expected, but warned that inflation risks from rising food prices and a planned increase in utility tariffs could force the bank to resume tightening.
What's Next
The National Bank will release its next inflation forecast on July 15, which will guide the August rate decision. It remains unclear whether the bank will hold rates through year-end if inflation accelerates due to fiscal spending or external shocks.
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NBK signals rate pause after cutting to 13.5%
