Kazakhstan: NBK refrains from rate hike but issue is still on the agenda

The National Bank of Kazakhstan (NBK) today kept the base rate unchanged at 13.5%, whereas we had expected an increase to at least 15% in order to support the national currency, which is still under pressure. The NBK believes that February’s 325 bps hike is sufficient and accounts for the aggravation of geopolitical risks. While the Kazakh central bank noted the inability to present updated inflation and economic growth forecasts, it did not exclude that they will be worse compared to January’s forecasts. The tone of the press release remained cautious, which leads us to believe that an additional rate hike is possible in the near term should elevated external risks persist.