Kazakhstani financiers expect the National Bank to cut the base rate, although the regulator denies such intention

The Association of Financiers of Kazakhstan has published its forecast on the base rate / Photo: Shutterstock

The vast majority of market participants (65%) interviewed by the Association of Financiers of Kazakhstan (AFK) expect the National Bank to cut the base rate at its next meeting on November 24. Last month, the regulator said that further easing of the monetary policy would be possible only if annual inflation was lower than 10%. (It was 10.8% in October.)

Representatives of banks, insurance companies, brokerage and analytical organizations were among those who spoke to the AFK. The association wanted to know what short-term and long-term expectations the experts have on the Brent crude oil price, the exchange rate of the tenge, inflation, the country’s GDP and the base rate.

Base rate

More than half of those respondents who believe the base rate will be cut expect the rate to be at 15%, about a third think the rate will be reduced to 15.75%, while the rest assume that the rate may be cut to 15.5 %. On October 6, when the National Bank held its last meeting, the base rate was cut to 16%. Moreover, the respondents have also worsened their forecast for the base rate in 12 months from now from 12.5% to 13%.

On October 6, the National Bank cut the base rate from 16.5% to 16% per annum. At the time, the regulator said that the rate was unlikely to be cut further any time soon. Chairman of the National Bank Timur Suleimenov said that cutting the base rate to restrain inflation and excessive money supply is unacceptable.

On August 25, the National Bank lowered the base rate from 16.75% to 16.5% for the first time since January 2021. In early 2021, the rate was reduced from 12% to 9% but then it grew to 16.75% in December 2022.


Kazakhstan’s financial market expects inflation to be at 10.9% by November 2024. This evaluation almost matches with the current inflation (10.8%). Even though financiers do believe that it is possible to cut inflation two times from 20.3% to 10.1% this year (which was demanded by President Kassym-Jomart Tokayev earlier this year), it is unlikely that inflation will once again be at 5% in 2024. In late October, the inflation rate was 10.8% (11.8% in September) year-on-year and 0.7% (0.6% in September) month-on-month.

GDP and oil price forecasts

Experts’ expectations related to oil prices within a year are quite stable. The financiers forecast the oil price to be at $88.60 in November 2024. ($88.70 in a previous survey.) As of November 9, January futures for a barrel of Brent crude oil are traded slightly higher than $80. Yesterday the price was $79.5. The respondents believe that the oil price increase might be related to a possible shortage of oil in the market due to the decision by Saudi Arabia and Russia to continue their cutting of oil output and ongoing geopolitical tensions in the Middle East.

The experts also improved their forecast for Kazakhstan’s economy, which is expected to grow by 4.3% compared to 4.1% forecasted last month. However, the forecast is still lower than the actual (4.7% over the first nine months of 2023) and planned figures by the Ministry of Economy (4.7% at the year-end).

In August, National Economy Minister Alibek Kuantyrov presented a forecast for the social and economic development of Kazakhstan in 2024-2028 with expected growth of the GDP by 5.8% on average. The ministry expects that the country’s economy will grow by 5.3% in 2024 and by 6% by 2028. The industrial sector is going to grow by 4% on average.

In a previous forecast, the ministry expected the GDP to grow by 4% in 2023, 5% in 2024 and 6% in 2028. In early September President Tokayev ordered the cabinet to ensure the national GDP to be growing at 6% to 7% a year in order to double the current rate and reach the $450 billion mark by 2029.

The exchange rate of the tenge

According to financiers, the exchange rate of the national currency can strengthen to 474.3 tenge per one USD (481.3 in a previous forecast) due to the tenge’s exchange rate strengthening in October (by 1.1% or 5.35 tenge), increased sales of foreign currency from the National Fund (more than $1 billion for the third month in a row), high oil prices and the upcoming tax period. Within twelve months the exchange rate of the tenge will be at 492, which is slightly better than a similar forecast in October (494 tenge), according to the respondents.

In addition, the financial market doesn’t expect significant changes in the exchange rate between the ruble and USD despite certain actions by the Russian government. For example, they once again require exporters to sell the foreign currency they earned and sharply increase the base rate. Experts interviewed by the AFK said that they expect the ruble exchange rate to be at 98.3 rubles per USD (101.2 last month).

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