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Kazakh Central Bank Cuts Rates as Inflation Dips

Tuesday 14 February 2012

ALMATY (Reuters, Gazeta.KZ ) – Kazakhstan’s central bank dropped interest rates on Tuesday for the first time since 2009 and said it could cut them again in April, responding to a dip in inflation to shore up an already fast-growing economy fuelled by high oil prices.

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Grigory Marchenko

The bank cut its key refinancing rate by 50 basis points to 7.0% after inflation in Central Asia’s largest economy slowed to an annualised 5.9% in January. That was its lowest level since November 2009 and sharply down from December’s 7.4%.

Grigory Marchenko, Chairman of the National Bank of Kazakhstan told reporters on Tuesday in Almaty:

Kazakhstan has enough money to cope with crisis […] Crisis always occurs unexpectedly. If analysts are constantly predicting the crisis, then it either will not occur or will occur, but not the way it is predicted.

Virtually every newspaper every day publishes at least two or three materials about a possible second wave of crisis and what it will be. In any case, the country has enough money to cope with the crisis lasting 2-3 years.

Banks have the main way of investing – the provision of loans to the real sector. They started doing it thanks to the healthy situation, which we have established: on the one hand, a stable exchange rate and on the other hand, the continuing growth of deposits.

So, I think everybody should calm down, look around and realize that the macroeconomic situation in Kazakhstan is extremely favourable.

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