Kazakhstan's Central Bank Holds Key Rate at 18% Amid Slowing Inflation

The National Bank of Kazakhstan has decided to keep its key policy rate unchanged at 18% per annum. The decision was announced on Friday, March 6, with the rate corridor maintained at +/- 1 percentage point.

The regulator's move is based on the results of a forecast round, updated assessments of key macroeconomic indicators, and the balance of inflation risks. Annual inflation in February 2026 slowed to 11.7%, down from 12.2% in January, aligning with projections. All components of inflation are showing a deceleration in growth rates.

According to the central bank's statement, disinflation is being supported by moderately tight monetary conditions, a strengthening tenge, slowing unsecured consumer lending, and a reduction in excess liquidity through phased increases in minimum reserve requirements and mirroring operations. A package of anti-inflationary measures implemented by the government and the National Bank is also contributing.

"In particular, a significant contribution to reducing inflation comes from the moratorium on price increases for housing and utility services and motor fuels," the statement noted. "The impact of the VAT increase on inflation is assessed as limited."

The National Bank had previously signaled its intention to maintain current monetary conditions, including the key rate, until at least the end of the first half of 2026.

Historical Context of Rate Changes

The key rate has seen several adjustments over recent years. It was held at 15.25% in January 2025 before being raised to 16.5% in March of that year due to updated inflation and economic growth forecasts. The rate remained at that level through decisions in April, June, and August.

A significant hike occurred in October 2025 when the rate was increased to its current level of 18%. It was subsequently maintained at this level in November 2025 and January 2026.

The Role of the Key Rate

The base rate is the primary instrument of Kazakhstan's monetary policy. It indicates the interest rate at which commercial banks can borrow from the central bank and largely determines lending and deposit rates for businesses and households.

Changes to this rate influence inflation through money market interest rates and exchange rates. An increase makes borrowing more expensive, which typically reduces spending and saving increases among businesses and consumers—this slowdown in demand helps curb price growth.

The National Bank estimates that changes to this policy tool have a noticeable effect on inflation with a lag of approximately 12-18 months.

Decisions on adjusting the key rate are made by the central bank's Monetary Policy Committee during its eight scheduled meetings per year.