Kazakhstan cuts by 50bp as the region continues to defy global hawks

Kazakhstan can continue easing rates for now, but its disinflation and monetary flexibility depend heavily on a strong tenge and therefore require high real rates.

• The National Bank of Kazakhstan cut its base rate by 50bp to 15.75%, at the dovish end of the 25-50bp market-expectation range and more than ING’s cautious 25bp call.
• Annual CPI slowed to a below-expected 9.3% year-on-year, while household and economist inflation expectations improved.
• Disinflation is concentrated in food, whereas non-food and services inflation remain sticky; CPI is still well above the 5% target, and domestic demand remains robust despite slower GDP growth.
• The tenge has risen 11% against the US dollar since the outbreak of the Iran war and 20% year-on-year, helping contain imported inflation, although its reliance on portfolio flows and commodities is a risk.
• The NBK cited tighter global monetary conditions, higher global food and energy prices, and tighter financial conditions as inflation risks, while indicating a low likelihood of a rate change by the end of 2026.

Takeaway: ING expects the NBK to hold in December and follow a cautious easing path in 2027, because preserving exchange-rate resilience in a less supportive global environment will require real rates to remain high.