Kazakhstan Raises Cap on Long-Term Foreign Currency Deposit Rates to 2.5%

Kazakhstan's Deposit Guarantee Fund has raised the maximum rate on long-term foreign currency deposits to 2.5% a year, effective from October. The previous ceiling was 1%. The change covers only savings deposits with terms longer than 12 months; the limit for other deposits remains at 1%. The fund says liberalisation of foreign currency deposit rates will proceed in stages.

Chairman Adil Utembayev said the next step has been taken, but the fund will act consistently and gradually, assessing both the situation and the market's response. Dollarisation stood above 80% in 2015, fell to 25% in 2024 and 22% last year, and now stands at 19.2%.

Almat Orakbay, a leading expert at the Association of Financiers of Kazakhstan, said current levels of about 20% show a significant drop in demand for dollar deposits. He added that slowing inflation, which fell from 12.3% to 9.3% since the start of the year, has raised tenge asset yields to about 6.9%.