NB raises base rate to 16%

ASTANA. KAZINFORM - Kazakhstan's National Bank decided to raise its base rate to 16% to keep inflation in the medium-term target range of 6-8%, according to the press service of the National Bank.

"Given the economic data and the prospects for growth, the National Bank decided to raise its base rate to 16% to keep inflation in the medium-term target range of 6-8%," according to the press release. National Bank has decided to narrow the interest rate corridor of ± 1 percentage point to reduce the volatility of interest rates in the money market and provide clear signals to the market, the statement reads. Kazakhstan's GDP growth slowed in the first half of 2015 due to a sharp decline in exports. Imports decreased due to the decline in domestic demand caused by lower real incomes. Inflation has declined since the beginning of 2015 as a result of the reduction in import prices and a slowing domestic economy. However, fiscal stimulus and public investment will contribute to the development of key sectors of the economy and sustain economic growth in the medium term.