(Bloomberg) -- Kazakhstan’s central bank delivered its third consecutive interest-rate hike as inflation accelerated in Central Asia’s largest energy producer.
The National Bank raised the key rate by 25 basis points to 9.75%, it said in a statement Monday.
“In the context of an increased external and internal inflationary background, the National Bank continues to normalize monetary policy in order to reach a corridor of 4-6% in 2022,” the central bank said, adding it would continue a deflationary monetary policy.
The move comes amid accelerating inflation in Kazakhstan, which reached 8.9% in September, tracking persistent price growth in Russia and internationally. On Friday, the Russian central bank surprised the market with a larger-than-expected rate hike.
Last week, the National Bank said increased demand for Russian goods was driving the tenge’s decline against the ruble and warned of “additional growth in consumer prices in Kazakhstan by importing accelerating inflation from” its largest trading partner.
Kazakhstan has boosted purchases of “socially significant food items” as part of the government’s anti-inflation plan that it introduced last month. Growth in fuel and grain prices could hurt efforts to stabilize inflation, Governor Yerbolat Dossayev told the cabinet on Oct. 12.
The central bank’s rates corridor, formed from the overnight deposit and lending rates, was kept at plus or minus 1 percentage point around the benchmark.
The next key rate decision is scheduled for Dec. 6, according to the statement.
- Kazakhstan’s economy grew 3.4% in Jan.-Sept.
- The tenge is little changed against the dollar since the previous key rate decision on Sept. 13
- The national oil fund and state companies sold a combined $1.1 billion on the domestic market in September, while the central bank said it didn’t intervene in the currency market
- The central bank-run pension fund has transferred about 1.9 trillion tenge ($4.45 billion) to customers since Feb. 1 as stimulus to help improve living conditions
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