Kazakhstan’s National Bank holds base rate at 16.5%

The country’s annual inflation stood at 11.3% in May

The Bank’s Monetary Committee left its base rate unchanged at 16.5% on Thursday, with a band of +/- 1 percent, Kazinform News Agency reports.

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The Bank’s press service said: “The decision to keep the current monetary policy stable was made based on an evidence-based analysis, updates on projections and assessment of the inflation risk balance”.

The country’s annual inflation stood at 11.3% in May, fueled by growing prices for services. Food price inflation rose to 0.9% on-year in May.

The core inflation and inflation adjusted stood at 10.1% and 11.4% year-on-year, respectively, due to upward pressure on prices because of strong consumer demand, increase in production costs and budgetary spending.

Consumer expectations for inflation also rose to 14.1% in May from 12.2% in April, triggered by instability and uncertainty.

Kazakhstan’s National Bank also pointed to additional external pressures such as high inflation in Russia, growing global food prices, currency fluctuations and trade wars.

Photo credit: Kazakh National Bank.

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