National Bank of Kazakhstan Drops Rate 50bps to 6.50%

The National Bank of Kazakhstan reduced its key refinancing rate by 50 basis points to 6.50% from 7.00% as inflationary pressures eased.  NBK Chairman, Grigori Marchenko, said: "Given the trends in financial markets and the slowdown annual inflation Board of the National Bank of Kazakhstan decided to set April 2, 2012 the official rate refinancing of the National Bank of Kazakhstan at the level of 6.5% per annum, which is historically minimal."  

The Kazakh central bank also cut the refi rate at its February meeting, and last increased the interest rate in March last year by 50 basis points to 7.50%.  Kazakhstan reported inflation of 4.7% in February, 5.9% in January, 7.4% in December, 8.7% in September, compared to 9.0% in August, and 8.50% in July, and above the official inflation target of 8 percent.  Kazakhstan's economy grew at an annual pace of 7.2% in 3Q11, up from 7% in the June quarter, and 6.8% in the March quarter.  

Kazakhstan recently returned its currency, the Tenge, to a "managed" free float, abolishing the tenge's trading corridor at the end of February last year.  The Kazakhstani Tenge (KZT) last traded around 147 against the US dollar.

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