At a briefing at the National Bank of Kazakhstan, Governor Timur Suleimenov explained the reasons for lowering the base rate. The decision came after extensive discussions, reports infohub.kz.
"The progress in reducing inflation is evident. As you may recall, in September last year inflation approached 30%, now it has moved closer to 10%. This has created room for cutting the base rate. We are moving very cautiously, by 0.25 percentage points, because significant uncertainty remains. This is primarily external uncertainty, as oil prices and prices for other goods are still volatile," Suleimenov said.
He added that the tenge exchange rate is now fairly stable. However, he cautioned against premature optimism: "But to say that inflation is defeated, the work is done, and we can relax—by no means. There are still many pro-inflationary factors. ... There were two options considered at the monetary policy committee—hold or cut by 0.25. There were quite heated debates. For two days, to be honest, we discussed; our committee meeting stretched over two sessions. In the end, a decision was made to cautiously cut by 0.25 percentage points."