Following the recent cut in the base rate by the National Bank of Kazakhstan, many depositors are wondering whether to withdraw their funds from deposits and invest in alternative instruments. The answer came at a National Bank briefing, where Chairman Timur Suleimenov dispelled these concerns, as reported by infohub.kz.
According to Suleimenov, deposits continue to offer positive returns under current conditions. He stressed that the base rate and deposit rates are precisely designed to ensure positive real returns, that is, returns exceeding inflation.
"As long as the rate remains above inflation, for instance, when inflation was 13%, the rate was 18%. Now inflation is 9.8%, and the rate is 16.25%. Deposits follow the rate with a slight lag. So anyone looking to protect their savings from inflation will always find that deposits provide both safety and a modest return above inflation," the National Bank head noted.
He added that the National Bank welcomes alternative investments but does not expect a significant outflow from deposits. "Investments in securities, bonds, and digital financial assets are also welcome. The economy should not be funded solely by banks. We must develop all forms of funding for the real sector. Of course, deposits will continue to play a key role in banks' balance sheets in terms of funding the economy. We certainly do not foresee any major changes here," concluded Timur Suleimenov.