The National Bank of Kazakhstan has signaled that it may further raise minimum reserve requirements (MRR) for commercial banks if the already approved increases fail to curb excess liquidity in the money market after September 2026, DKNews.kz reports.
According to an official policy document, the regulator is prepared to consider additional tightening if, following the third stage of reform, excess liquidity begins to rise again and the share of liquidity absorbed through MRR falls below 50 percent of total excess liquidity, measured as a six-month average.
Why the central bank is focusing on reserves
In recent years, the fight against inflation in Kazakhstan has gone beyond adjustments to the base rate. In 2024, the central bank chose a less visible but highly sensitive instrument for banks – higher reserve requirements, effectively withdrawing “idle” money from circulation.
The logic is straightforward: less free liquidity in the banking system means less pressure on prices.
Funds placed as mandatory reserves are frozen at the central bank and cannot be used for lending or investment, directly reducing the volume of money circulating in the economy.
Three stages of tightening: what has happened and what lies ahead
The increase in MRR has been designed as a three-stage process.
Stage one – from September 2025
Banks were required to hold:
- 3.5 percent of their tenge liabilities, and
- 10 percent of foreign-currency liabilities as reserves at the central bank.
According to the regulator, this step:
- reduced excess liquidity from 7.7 trillion to 5.8 trillion tenge, and
- increased total reserves from 0.8 trillion to 2.6 trillion tenge.
Stage two – from April 2026
- the tenge requirement remains at 3.5 percent;
- the foreign-currency requirement rises to 12 percent.
Total liquidity absorption at this stage is expected to reach 3.5 trillion tenge.
Stage three – from September 2026
Planned levels are:
- 5 percent for tenge liabilities;
- 15 percent for foreign-currency liabilities.
At this point, the total volume of funds tied up in reserves is projected at 3.9 trillion tenge.
Why banks are unhappy
From the very beginning, banks have been critical of this policy. Money locked in reserves:
- does not generate interest income;
- cannot be used for lending;
- directly reduces profitability.
Now the market is facing the possibility that even these measures may not be the final step. If the central bank decides the effect is insufficient, banks could see their usable resources shrink even further.
The key risk: going too far
From a regulatory standpoint, the approach is logical – inflation risks remain, and liquidity in the system is still high. But tighter reserve rules also carry side effects:
- lending growth may slow;
- loans for businesses and households could become more expensive;
- pressure on banks’ margins may increase.
This is why market participants are increasingly cautious, hoping the situation does not repeat past episodes where overly rigid regulation, such as strict caps on the annual percentage rate (APR) in mortgage lending, later required painful adjustments.
What happens next
For now, the central bank has not made a final decision on further tightening. But it has clearly outlined the conditions under which it would act.
One thing is already evident: the era of abundant and freely available liquidity for Kazakhstan’s banking sector is coming to an end, and the burden of fighting inflation is increasingly being shifted onto financial institutions themselves.
