National Bank of Kazakhstan lowers base rate to 16% per annum, as analysts predictedThe National Bank's Monetary Policy Committee has announced a 50 basis points reduction in the base rate, bringing it down to 16% per annum with an interest rate band of ±1 p.p, the regulator said on Friday."Annual inflation is slowing down steadily. External inflationary pressure is decreasing due to central banks' taming policies and lower global food prices. However, there's worry about the impact of raises in controlled prices, which used to be balanced by currency rate changes. Given the current situation and risks, there's not much room to reduce the base interest rate in 2023. We might consider easing monetary policies at year-end if annual inflation falls to single digits," according to the regulator.In September 2023, annual inflation dropped to 11.8%, matching the lower end of the projected range of 10-12% for 2023."Inflation is slowing down due to monetary policy, fiscal stimulus, and a diminishing high base effect from last year. September's figure was lower than expected due to a slight increase in housing and utility service costs. Monthly inflation remains high at 0.6%, which is above the usual levels. Core inflation, showing inflation stability, is now stabilizing," according to the statement.According to the National Bank, while inflation is slowing down, people's expectations for future inflation have increased slightly, influenced by reforms in the housing and utility services market and rising fuel prices. In September, the expected inflation rate for the next year rose to 17% compared to 16.4% in August. However, the perception of current price increases in September actually decreased to 17.8% from 18.4% in August.External inflation continued to slow down, but some new factors and risks could push prices up. Global prices for dairy products, vegetable oils, meat, and grains are falling. However, central banks in developed nations are not cutting interest rates because inflation is stable. In fact, in September 2023,  the ECB even raised interest rates to combat high inflation."The US Federal Reserve is raising interest rates again due to concerns about inflation picking up, driven by increasing oil prices as OPEC+ countries continue extending their voluntary cuts in oil supplies. Russia, during September 2023, continued to tighten monetary policy in response to accelerating inflation," according to the National Bank.The regulator points out that inflation risks are rising due to higher government spending this year and uncertain expectations about future inflation. Other factors include the delayed impact of higher fuel, lubricant, and utility prices, which used to be offset by currency exchange rate changes, and a less optimistic forecast for this year's wheat harvest.The National Bank is concerned about future inflation risks stemming from the uncertain geopolitical situation, including the possibility of rising inflation in Russia and higher global food prices if a grain deal isn't resumed."The inflation has been decreasing steadily, allowing for some reduction in the base interest rate. However, there's limited room for further interest rate cuts in 2023 due to various inflationary risks both from external factors and within the economy. Any consideration of easing monetary policy later in the year depends on annual inflation slowing down to single-digit levels," according to the National Bank. (ICE ALMATY)

Fonte notizia: INTERFAX