Kazakhstan's central bank cuts base rate by half a point as lending conditions shift

Kazakhstan's National Bank cut its base rate by half a percentage point on October 23. The decision followed a slowdown in annual inflation, which fell to 9.3% in September from 9.8% a month earlier. However, loan costs for households and businesses remain high.

Economist Andrey Chebotarev said that more banks competing for clients would lead to faster rate cuts. He added that rising non-repayment of loans raises the risk rate on remaining loans. Kurultai deputy Nikita Shatalov said the National Bank and the Agency for Development and Regulation of the Financial Market are working to slow consumer lending, citing high debt levels among some groups and additional indicators for second-tier banks.

Madiyar Tungyshbekov of the Atameken National Chamber of Entrepreneurs said the cut does not automatically lower lending rates, which usually happens within two months. The National Bank said future rate decisions will depend on inflation dynamics, inflation expectations and the balance of economic risks. It aims to bring inflation down to 5% in 2028.