Kazakhstan's central bank holds key rate at 18% amid stubborn inflation

ALMATY, March 6 (Reuters) - Kazakhstan's central bank on Friday held its policy rate unchanged at 18%, amid stubbornly high inflation in Central Asia's largest economy, a major energy and minerals exporter.

Although the regulator lowered its inflation forecast for 2026 to 9.5-11.5% from 9.5-12.5%, it said there was still no scope for easing monetary policy. It may consider rate cuts in the second half of 2026, it added, if inflation declined in a sustained fashion.

In a briefing, central bank governor Timur Suleimanov said: "Additional risks are forming in the external sphere against the backdrop of strengthening geopolitical tensions, oil price fluctuations, changing prices in trading partner countries."

"In these conditions, stabilising inflation expectations and strengthening deflation requires a continued moderately tough monetary policy. At the present moment, there is still not space for reducing the rate."

Like other Central Asian countries, whose economies are closely intertwined with Russia's, Kazakhstan has experienced both rapid economic growth and rising inflation because of fallout from the war in Ukraine.

Inflation accelerated to 12.3% in 2025 from 8.6% in 2024. Month-on-month inflation accelerated to 1.1% in February from 1.0% in January.