Kazakhstan raises rate 4th time to lower inflation

% of readers think this story is Fact. Add your two cents.

     Kazakhstan’s central bank raised its benchmark interest rate for the fourth time, saying it was continuing to tighten its monetary policy stance to reduce inflation expectations and bring inflation back into its target range of 4.0 to 6.0 percent by the end of 2022.
     The National Bank of the Republic of Kazakhstan (NBK) raised its rate by a further 50 basis points to 10.25 percent and has now raised it 1.25 percentage points following rate hikes in July, September, October and today.

     After raising its rate sharply in March 2020 to curb inflation, NBK had to change course the following month due to the COVID-19 pandemic and cut its rate in April and July by a total of 3 percentage points.
     At its previous meeting in early December 2021, the bank’s monetary policy committee maintained the rate due to a slowdown in inflation and uncertainty about the impact of the Omicron variant of COVID-19.

      However, NBK also said it would continue to tighten its policy stance “more decisively” if the decline in inflation and inflation expectations did not stabilize.
     ”The internal situation, despite the presences of disinflationary precesses in recent months, is characterized by the presence of significant pro-inflationary risks both on the demand and supply side,” NBK said, adding inflation continues to be elevated in most countries around the world.
     Kazakhstan’s inflation rate eased for the second month to 8.4 percent in December from a 2021-high of 8.9 percent in September and October, helped by the government’s anti-inflationary measures, which helped food inflation decelerate.
     However, the cost of other non-food items rose, with gasoline prices up 19.6 percent and diesel fuel up 46.5 percent.
     ”The trajectory of core inflation points to the instability of the slowdown in inflationary processes,” NBK said, adding most respondents in its survey still expect the current rise in prices to continue or accelerate in the next 12 months.
     To help lower inflation, the central bank said it had already withdrawn from state programs that support the economy and confirmed it still expects inflation to decelerate to around 6.0 to 6.5 percent by the end of 2022.
     However, the central bank there may be an increase in inflationary pressures in the first quarter of this year due to the comparison with a relatively low base in the first half of 2021 and “in connection with the tragic events in Kazakhstan in early January this year.”
      Protests and rioting broke out in the capital of Almaty in early January over fuel prices that only ended after the president declared a nationwide state of emergency and ordered security forces to shoot to kill without warning. The official death toll hit 225.

     www.CentralBankNews.info