(Bloomberg) --
Kazakhstan's central bank kept interest rates on hold after a surprise hike last month helped to tame a jump in food prices.
The base rate stayed unchanged at 9.25% on Monday, the National Bank of Kazakhstan said in a statement. The decision was forecast by all eight economists polled by Bloomberg.
“A slowdown in inflation to the mid-range of the 4%-6% target corridor is expected throughout 2020,” the central bank said. “That will support monetary policy at the current level.”
Increased social spending during a transfer of power in the central Asian nation this year pushed up inflation, forcing the government to take measures to fight price rises on a range of food staples. An unexpected rate hike in September slowed overall inflation, but food prices still jumped to a two-year high.
The central bank's rates corridor, formed from the overnight deposit and lending rates, was kept at plus or minus one percentage point around the benchmark. The next rate decision will be announced on Dec. 9, according to the statement.
Key Insights:
- The central bank reiterated that it expects inflation to stay at 5.7% to 5.8%, or within the targeted corridor.
- Inflation could remain volatile in the short term due to a multitude of factors driving price growth, according to the statement.
- The tenge has weakened about 0.4% to 388 versus the dollar since the last rate decision on Sept. 9. The currency is down 1.8% this year.
To contact the reporter on this story: Nariman Gizitdinov in Almaty at ngizitdinov@bloomberg.net
To contact the editors responsible for this story: Torrey Clark at tclark8@bloomberg.net, Natasha Doff
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