National Bank of Kazakhstan revises base rate forecasts, expects smother drop in 2025-2026

ALMATY. Dec 9 (Interfax) - The National Bank of Kazakhstan's Monetary Policy Committee (MPC) has updated its forecast base rate path: it now expects the median rate to fall to 13.75% in 2025 and to 12% by the end of 2026, the regulator said in its November monetary policy report.

MPC members forecast the base rate within the range of 12-14.75% for 2025 and 10-13.75% for 2026. In its August forecast, the National Bank assumed a more significant reduction of the median base rate to 11.9% in 2025 and to 10% in 2026.

"The opinion of each member of the Monetary Policy Committee was based on the information available at the time of the meeting [on November 29]. This is an assessment by the members of the type of monetary policy that, in their opinion, is necessary to achieve the inflation targets, taking into account current conditions and future prospects at the time of the decision," the regulator's report says.

However, the National Bank warns that the proposed base rate path does not imply an obligation for the National Bank to maintain it at this level. "When communicating decisions, the National Bank will explain the factors and conditions for their adoption, including in the event of a deviation from the previously estimated interest rate path," it said.

The National Bank on November 29 unexpectedly raised the base rate to 15.25% per annum from the 14.25% at which the rate had been held since July. The rate had previously been lowered on four occasions this year: by 50 basis points to 15.25% in January, by another 50 bps to 14.75% in February, by 25 bps to 14.5% in May and 25 bps to 14.25% in July.