Kazakhstan: National Bank To Tighten Control Over Inflation

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In the medium term, the main priority of the National Bank of Kazakhstan is to reduce inflation to a level of 3-4 percent. Head of the financial structure Daniyar Akishev announced the news during an expanded meeting of the government dedicated to the 2016 results on February 3. “According to the recent address of the President of Kazakhstan, the National Bank will continue to implement the inflation targeting. In the medium term, the priority task is to gradually reduce the inflation rate to 3-4 percent,” he stressed.

The head of the NBK also noted that the regulator will support the long-term economic growth by finding the optimal balance between the macroeconomic stability and the inflation targets. According to him, the decline in inflation is the most important indicator of the stabilization of the macroeconomic situation in the country.

Daniyar Akishev stressed that the present KZT exchange rate fully corresponds to the objective factors.

“After the transition was made to the regime of freely floating exchange rate in order to adapt the subjects of the economy to the new conditions, there took place a stabilization of the exchange rate. Today, the rate is fully consistent with the objective factors, ensuring the competitiveness of our producers. And all this takes place against the background of the National Bank’s non-intervention in the foreign exchange market. Since September 2016, we have not conducted any intervention,” the head of the National Bank said.

He also mentioned another achievement of his agency: the considerable progress in the process of de-dollarization of the economy in 2016.

“In 2016, the volume of deposits in tenge increased by 66 percent, or by KZT3.3 trillion, while the foreign currency deposits fell by 10 percent, or by KZT1.1 trillion. The level of dollarization of deposits has decreased from 70 percent to 55 percent; as for the deposits of individuals, the drop was from 80 to 62 percent,” Akishev stated.

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