Kazakhstan’s National Bank prepares for base rate decision: Impact on the tenge and bonds
On October 23, 2026, the National Bank of Kazakhstan will announce its next base rate decision. This move dictates domestic borrowing costs and the appeal of tenge assets to foreign investors.
Current currency and market conditions
The Kazakh currency has shown strong momentum since the start of 2026. The tenge has strengthened against the dollar by over 10%. As of October 19, the official exchange rate stands at 452.12 tenge per dollar.
The oil market supports the national currency: Brent crude remains above $100 a barrel. This offsets a drop in domestic production. From January to September, Kazakhstan produced 69.4 million tons of oil, or 91.7% of last year’s output. The decline stems from fires at the Tengiz field and attacks on the Caspian Pipeline Consortium’s export route.
A second factor supporting the tenge is the influx of foreign capital into government securities. Since the beginning of the year, nonresident investments in Kazakh government bonds have grown by 786 billion tenge, reaching 2.6 trillion tenge. Investors need the national currency to buy these bonds, creating steady demand. The regulator itself has not intervened in the currency market this year.
The National Bank’s decision and market positions
The National Bank has eased monetary policy three times since June 2026. The rate dropped sequentially from 18% to 17%, then to 16.75%. In early September, the regulator cut the base rate to the current 16.25% per annum.
Statistics drive these moves: annual inflation fell to 9.3% in September from 9.8% in August. But room for further easing is shrinking. National Bank Chairman Timur Suleimenov previously noted that rate cut opportunities are limited due to persistent pro-inflationary risks. He also pointed to a seasonal factor: demand for foreign currency in the country traditionally rises toward the end of the year.
Alpari analyst Anna Bodrova, speaking to DKNews.kz, highlights risks to the currency market. She estimates that further rate cuts could make tenge assets less attractive to some investors. If Kazakh bond yields fall, nonresident interest will weaken, stripping the national currency of a major support source.
Risks and opportunities
For the regulator, the upcoming decision comes down to a choice between cheaper credit for the economy and retaining foreign capital in government bonds.
Holding the rate at 16.25% will lock in current bond yields and support the tenge, benefiting importers. Cutting the rate will make lending more accessible for Kazakh businesses but could trigger an outflow of nonresident funds and weaken the national currency amid a seasonal spike in dollar demand.