Kazakhstan's base interest rate has been set at 15.75% per annum, with a corridor of plus or minus 1 percentage point. The Monetary Policy Committee of the National Bank of Kazakhstan made the decision as annual inflation declined for the twelfth consecutive month, reaching 9.3% in September 2026, DKNews.kz reports.
The decision reflects growing confidence that inflation is easing, supported by moderately restrictive monetary policy and favourable movements in the Kazakhstani tenge. However, the central bank remains cautious: underlying price pressures are still elevated, external economic conditions are challenging, and inflation could accelerate temporarily towards the end of the year.
For businesses, borrowers and investors, the announcement provides an important signal. Kazakhstan's monetary policy is gradually creating room for lower interest rates, but the National Bank is not yet ready to commit to a sustained easing cycle.
Inflation falls for 12 consecutive months
Annual inflation slowed to 9.3% in September 2026, continuing a downward trend that has now lasted an entire year.
The decline was visible across several major categories of consumer spending, although the pace of price growth remains uneven.
- Food inflation: declined to 8.5% from 9.5%, supported by lower fruit and vegetable prices and slower increases in meat prices.
- Non-food inflation: eased to 11.0% from 11.4%, mainly because fuel prices rose more slowly on an annual basis.
- Services inflation: remained at 8.9%, reflecting continued rapid price increases in unregulated services.
Despite the improvement, inflation remains significantly above the National Bank's medium-term target of 5%.
September's monthly inflation stood at 0.6%, unchanged from August. After seasonal adjustment, the monthly rate declined to 0.7% from 0.9%.
Meanwhile, the median of seasonally adjusted core inflation estimates remained at 0.7%. This suggests that underlying inflationary pressure has not disappeared, even as the headline annual figure continues to improve.
Inflation expectations are improving
Another encouraging development is the decline in inflation expectations among households and financial market participants.
One-year-ahead inflation expectations fell to 11.8% in September, compared with 12.1% in August.
Professional market participants also revised their forecasts downward:
- 2026 inflation forecast: lowered to 9.5% from 10.0%.
- 2027 inflation forecast: reduced to 8.3% from 8.5%.
These changes matter because expectations can influence actual price developments. When consumers and businesses anticipate persistent inflation, they may adjust spending, pricing and wage decisions accordingly.
Although expectations have moderated, they remain relatively high. The National Bank therefore considers maintaining sufficiently restrictive financial conditions essential to securing a lasting decline in inflation.
Kazakhstan's economy grows by 4.2%
Monetary policy is being adjusted against the backdrop of continued economic expansion.
According to preliminary data, Kazakhstan's gross domestic product increased by 4.2% in January–September 2026, driven primarily by non-resource industries.
Construction, manufacturing and transport were among the main contributors to growth, indicating that economic activity remains supported by sectors outside the extractive industries.
Investment performance was particularly strong. Fixed-capital investment increased by 7.0%, while investment in the non-resource sector, excluding budgetary funds, rose by 25.0%.
This investment activity supports economic development, but it also creates a challenge for monetary policy. Strong domestic demand can make it more difficult to bring inflation down, especially when production capacity and supply do not expand at the same pace.
Consumption growth has moderated compared with the previous year, partly reflecting a normalization in consumer lending growth. Nevertheless, fiscal and quasi-fiscal stimulus, together with substantial investment activity, continues to support elevated domestic demand.
Global energy and food prices remain a major risk
While Kazakhstan is experiencing lower domestic inflation, the international environment remains challenging.
Developments in the Middle East continue to support high global energy prices. At the same time, international food prices are rising, creating additional risks for countries exposed to imported inflation.
The Food and Agriculture Organization's food price index reached 136.0 points in September, increasing by 1.5% from the previous month and 5.8% year on year.
The increase was driven mainly by higher prices for cereals, sugar and vegetable oils, amid adverse weather conditions and logistical constraints.
For Kazakhstan, these developments are relevant because international commodity prices can influence domestic production costs, transport expenses and retail prices.
Central banks worldwide are tightening monetary policy
The National Bank also highlighted increasingly restrictive global monetary conditions.
In September, the European Central Bank raised interest rates for the second time in 2026, while the US Federal Reserve increased rates for the first time since 2023, according to the National Bank's assessment.
The Bank of Russia maintained its key interest rate, pausing its previous easing cycle amid renewed inflationary pressure.
Tighter international financial conditions can affect capital flows, borrowing costs and exchange rates in emerging markets, including Kazakhstan.
These developments strengthen the case for a cautious domestic monetary policy, even when local inflation indicators show improvement.
What is helping to stabilize the tenge and prices?
The National Bank identified several factors contributing to the slowdown in inflation.
Moderately restrictive monetary conditions have helped contain demand, while favourable exchange-rate developments have reduced some inflationary pressure.
Liquidity management measures have also played a role, including mirroring operations and increases in minimum reserve requirements.
In addition, measures regulating consumer lending have helped moderate credit-driven demand.
Together, these policies are intended to prevent excessive liquidity and borrowing from generating additional pressure on consumer prices.
Why inflation could rise again before the end of 2026
Despite twelve consecutive months of declining annual inflation, the National Bank has warned that the downward trend may not continue uninterrupted.
One important factor is the statistical base effect associated with regulated utility tariffs in 2025.
From October 2025 until the end of March 2026, Kazakhstan maintained a moratorium on increases in housing and utility tariffs. During the fourth quarter of 2025, utility tariffs declined by 14%.
Because annual inflation compares current prices with those recorded twelve months earlier, unusually low tariff levels in late 2025 could produce higher year-on-year inflation readings towards the end of 2026.
This would not necessarily indicate a broad acceleration in prices across the entire economy, but it could temporarily interrupt the decline in headline inflation.
Other domestic risks include fiscal and quasi-fiscal stimulus, elevated inflation expectations, fuel price developments and changes in regulated tariffs.
External risks include high global energy and food prices, accelerating inflation among Kazakhstan's trading partners and tighter global financial conditions.
Will Kazakhstan cut interest rates again in 2026?
The National Bank indicated that another change in the base rate before the end of 2026 is unlikely under the current balance of risks.
Although falling inflation and improving expectations have created room for monetary easing, policymakers believe that maintaining moderately restrictive conditions remains necessary.
The central bank's objective is to return inflation to 5% in 2028 and ensure that the slowdown in price growth becomes sustainable.
Further reductions in the base rate will depend on clear evidence that inflationary pressures are weakening consistently, rather than temporarily.
Future decisions will take into account actual inflation, inflation expectations and changes in domestic and external risks.
What the 15.75% base rate means for borrowers and businesses
The base rate is one of the most important reference points for borrowing costs across Kazakhstan's financial system.
It influences short-term money market rates and, indirectly, the interest rates banks offer on loans and deposits.
For households, a lower policy rate can eventually help reduce financing costs on new consumer loans and mortgages. However, the effect is not automatic: actual lending rates also depend on credit risks, funding costs, competition and individual banking conditions.
For businesses, a sustained decline in interest rates could gradually improve access to financing for investment and expansion. The timing and scale of such changes will depend on how commercial banks respond to monetary policy.
Depositors may also see adjustments in interest rates offered on savings products as market conditions evolve.
For now, the National Bank's message remains cautious. Lower inflation is creating opportunities for monetary easing, but price stability remains the priority.
Next interest rate decision scheduled for December 4
The next scheduled decision of the National Bank's Monetary Policy Committee will be announced on December 4, 2026, at 12:00 Astana time.
Until then, policymakers will continue monitoring inflation, consumer expectations, economic activity, global commodity markets and exchange-rate developments.
The key question for Kazakhstan's economy is whether the current decline in inflation can be maintained despite strong domestic demand and persistent external risks. A sustained improvement would strengthen the conditions for further interest rate reductions, while renewed price pressure could delay monetary easing.
We previously reported on Kazakhstan's earlier decision to cut the base rate to 16.25%, as inflation continued to slow. The latest reduction to 15.75% reflects further progress in easing price pressures, although the National Bank remains cautious about future interest rate cuts.
