The National Bank of Kazakhstan reduced the base rate to 16.75%. The decision was made at a Monetary Policy Committee meeting on July 24, 2026.
The base rate was thus changed again following its reduction in June, when it was lowered by one percentage point to 17% from 18%. It will remain at that level at least until the next Monetary Policy Committee meeting, scheduled for Sept. 4, 2026.
The National Bank said the decision was driven by continued slowing inflation. Annual inflation has slowed for nine consecutive months, easing to 10.3% in June from 10.4% a month earlier. Food inflation slowed to 10.4%, while non-food inflation remained at 11.7%. Services inflation accelerated to 9% due to higher prices for non-regulated services.
According to the regulator, the slowdown in inflation has been supported by a tight monetary policy, the strengthening of the tenge, stabilizing consumer activity, and anti-inflation measures implemented jointly by the National Bank and the government. At the same time, monthly inflation stood at 0.8% in June, while the current trend may indicate that the disinflationary momentum is weakening. However, more data will be needed to confirm this trend.
Analysts at BCC Invest had expected the base rate to be cut to 16.5%-16% by September. They expected it to remain at that level through the end of the year.
Participants in the National Bank’s survey gave a similar forecast. They expected the base rate to stand at 16% by the end of 2026 before falling to 12.8% in 2027 and 10.6% in 2028.
The National Bank also noted that economic activity in the country is accelerating. GDP grew 4.1% in the first half of the year or about 5.3% excluding the mining sector. Strong growth continued in construction, the processing industry and transport. Investment increased by 9.6%, while investment in the non-commodity sector, excluding public funds, rose by 28.9%.
At the same time, according to the regulator, the balance of risks remains tilted toward higher inflation. Among the main risks, the National Bank cited high inflation expectations among the population, further increases in fuel prices and utility tariffs, a possible strengthening of consumer demand, and accelerating external inflation.
The regulator emphasized that it does not set the base rate path in advance. Future decisions will depend on the sustainability of the current slowdown in inflation, conditions in external markets, developments in regulated tariffs and compliance with fiscal policy parameters. The National Bank said it may either pause changes to the base rate or change the direction of its policy decisions depending on incoming economic data.
