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The National Bank of Kazakhstan announced on March 6th its decision to keep the base interest rate unchanged at 18%. This key monetary policy tool, along with its +/- 1 percentage point corridor, remains in effect.

Factors Influencing Inflation

This decision was guided by updated assessments of inflation risks and macroeconomic indicators. In February, annual inflation slowed to 11.7%, aligning with forecasts, with a noticeable decrease across all inflation components. The National Bank attributes this slowdown to a combination of factors, including tight monetary policy, a strengthening tenge, a moderation in consumer lending, and coordinated anti-inflationary measures by the government and the National Bank. Notably, the moratorium on utility and fuel price increases significantly contributed to curbing inflation.

Understanding the Base Rate

The base interest rate is the primary instrument of the National Bank's monetary policy. It dictates the cost at which commercial banks can borrow money, thereby influencing interest rates on loans and deposits for individuals and businesses. Changes in the base rate typically impact inflation with a lag of approximately 12 to 18 months.

Previously, the National Bank had indicated plans to maintain the base rate at its current level until the first half of 2026.

Recent Rate Adjustments

The base rate stood at 15.25% at the beginning of 2025. It was raised to 16.5% on March 7th, then reached 18% on October 10th, where it remained for the rest of the year. On January 23rd, 2026, the rate was confirmed at 18%.

Mechanism of the Base Rate

Changes in the base rate influence inflation through money market interest rates and the exchange rate. When the rate increases, money in the economy becomes more expensive, leading to higher loan interest. This encourages individuals and businesses to reduce spending and increase savings, thereby dampening price growth and helping to control inflation.

Impact on the Tenge

Conversely, when the National Bank lowers the base rate, money becomes cheaper, which typically leads to a weakening of the tenge. However, in the long term, a sustained slowdown in inflation can contribute to strengthening the national currency.

Monetary Policy Committee Meetings

Decisions on adjusting the base interest rate are made by the Monetary Policy Committee of the National Bank. The committee convenes eight times a year according to a fixed schedule. The next decision is scheduled to be announced on April 24th at 12:00 Astana time.