The Monetary Policy Committee of the National Bank of Kazakhstan has decided to reduce the base rate from 17% to 16.75% per annum, while maintaining the interest rate corridor at ±1 percentage point.

In a press release, the regulator said the move was made amid a decline in annual inflation, which fell to 10.3% in June from 10.4% in May. Inflation has been slowing for nine consecutive months, The Caspian Post reports.

Food inflation decreased to 10.4% in June from 10.7% a month earlier. Non-food inflation remained unchanged at 11.7%, while inflation in the services sector stood at 9.0%, compared with 8.7% in May.

“Disinflation is being supported by the ongoing monetary policy, the strengthening of the tenge exchange rate, the stabilization of consumer activity, and a set of anti-inflationary measures implemented by the Government and the National Bank,” the regulator said.

The National Bank also reported that monthly inflation in June amounted to 0.8%, while the median estimate of seasonally adjusted core inflation was 0.9%. According to the regulator, the current trend could indicate a weakening of the disinflationary momentum, although the sustainability of this development needs to be confirmed by future data.

Household inflation expectations for the next 12 months increased to 13.4% in June from 12.7%. At the same time, expectations among professional market participants for 2026 remained unchanged at 10%, while forecasts for 2027 were revised downward to 7.8%.

The external inflation environment remains uncertain. The National Bank noted that renewed tensions in the Middle East have placed pressure on energy prices. Global food markets are showing mixed trends, with vegetable oil and meat prices rising due to strong demand and limited supply, while grain prices are declining amid improved harvest expectations.

Economic activity in Kazakhstan continues to strengthen. In the first half of 2026, GDP growth reached 4.1%, while growth excluding the mining sector was approximately 5.3%. Strong expansion continued in construction, manufacturing, and transport. Investment increased by 9.6%, with investment in the non-resource sector excluding budget funds rising by 28.9%.

The National Bank said consumer demand remains positive, although slower growth in real incomes and a slowdown in consumer lending are contributing to a continued moderate pace of consumer activity.

The regulator emphasized that the balance of risks remains tilted toward higher inflationary pressure. Key pro-inflationary risks include elevated inflation expectations, changes in fuel and lubricant prices, increases in housing and utility tariffs, a possible acceleration in consumer demand, and rising external inflation.

At the same time, the current restrictive stance of monetary policy, the delayed effects of previous policy decisions, and exchange rate movements continue to limit inflationary pressures.

“The decision takes into account the achieved reduction in annual inflation and allows for a proportional adjustment in the degree of monetary conditions’ tightness,” the National Bank said.

The regulator added that future decisions will depend on the sustainability of inflation trends, the parameters of regulated tariff adjustments, and developments in global fuel and commodity markets.

The National Bank stressed that it is not following a predetermined path for the base rate and may either maintain a pause or change the direction of its decisions depending on actual inflation trends and their alignment with forecasts.