Kazakhstan Cen.bank Cuts Policy Rate To 10.25 Pct
ALMATY, Aug 21 (Reuters) – Kazakhstan’s central bank cut its policy rate to 10.25 pct from 10.50 pct on Monday, citing declining inflation expectations, but warning that uncertain and volatile external conditions made further cuts less likely in the near term.
Analysts polled by Reuters had expected the central bank to hold the rate this time and cut it later this year.
“Easing of the monetary policy conditions is stipulated by the stable level of inflationary expectations, stabilisation of the situation on the commodity markets, and also by forecasts for the further deceleration of the inflation level in the medium term,” the bank said in a statement.
The bank added it had “reconsidered” the possibility of another rate cut in the near future because “the external situation can be characterized by the growth of uncertainty and the aggravation of risks”.
The Kazakh tenge, which has closely trailed the Russian rouble since early 2016 following a switch from a dollar peg to a free float, hit an eight-month low against the U.S. currency this month.
Russia is Kazakhstan’s main trading partner and a drop in the price of oil, both countries’ key export, has put additional pressure on the rouble already hurt by concerns about new U.S. sanctions against Moscow. (Reporting by Mariya Gordeyeva; Writing by Olzhas Auyezov; Editing by Richard Balmforth)