National Bank of Kazakhstan will hold base rate at 16.5% on Aug 29 - expertsThe National Bank of Kazakhstan is likely to leave its base rate unchanged at 16.5% at its policy meeting on August 29, as inflation shows signs of slowing but remains well above target, analysts told Interfax-Kazakhstan.All experts surveyed by Interfax-Kazakhstan agreed with the regulator’s earlier guidance that the base rate is unlikely to change until the end of the year.TIGHT POLICY IS WORKINGArman Beisembayev, an expert at the international brokerage group Tickmill, believes the base rate will be kept at the current level. He said that inflation in July remained unchanged compared to June, indicating a noticeable slowdown."This is a clear signal to the National Bank that tight monetary policy is finally transmitting into the economy and restraining inflation. Since inflation is not accelerating, there is no reason to raise the rate. But the inflation rate is still significantly higher than the regulator's 5% target, meaning there is also no reason to lower it. Therefore, the rate will be maintained," Beisembayev said.According to Daniyar Orazbayev, an analyst at Freedom Finance Global, the base rate will remain unchanged, as evidenced by both external and internal fundamental factors."Annual inflation stopped accelerating in July, and this tendency will likely continue in August, at least at the same level. Furthermore, external inflationary pressure continues to decrease: Russia’s economic indicators point to a slowdown," he said.Orazbayev added that a rate cut would only be possible if inflation slows further and the exchange rate stabilizes, making a reduction on August 29 “unlikely.”Daniyar Temirbayev, executive director of QAMS Association, also expects no change."Indeed, inflation expectations have increased, as August survey reports show. On the other hand, annual inflation in July remained at 11.8% (the same as in June), and monthly inflation decreased to 0.7% from 0.8%," he said.The recent increase in utility prices and the adoption of the new Tax Code (shifting the tax burden to consumers) may have influenced the rise in inflation expectations. However, the expert believes these factors could be temporary.BALANCE BETWEEN STABILITY AND DEVELOPMENTThe Kazakhstan Financial Association (KFA) said the policy rate is likely to be held steady as consumer price growth has slowed for five consecutive months.Its August survey showed that 78% of respondents expect the base rate to remain at 16.5% per annum, while 22% allow for a modest hike of 25–50 basis points."The market sees two scenarios: holding the rate or raising it by 25-50 b.p., with the former more likely. Persistent pro-inflationary risks, as well as the need to balance price stability and economic activity, are behind this consensus,” the KFA said.According to the KFA, despite the consistent slowdown in monthly CPI, annual inflation still significantly exceeds the target range (11.8% vs. 5%), and its structure indicates a steady rise in prices in the services sector and for non-food goods, especially those with a high import share.Despite the gradual easing in monthly CPI, annual inflation remains far above the target range (11.8% vs. 5%), driven largely by rising prices in services and imported non-food goods. Additional pressure comes from a weaker Tenge, with exchange rate moves increasingly feeding into consumer prices.Fiscal policy is also adding fuel: state budget spending rose 12.1% (1.3 trillion tenge) in the first half of 2025, while transfers from the National Fund reached 3.1 trillion tenge, or 59% of the annual plan, providing strong demand-side stimulus.“These factors force the regulator to act cautiously. Keeping the rate unchanged is a more balanced decision that helps anchor inflation expectations while preserving credibility of monetary policy,” the KFA said. (ICE ALMATY)

Fonte notizia: INTERFAX