At the meeting of the Government, Prime Minister Bakytzhan Sagintayev listed to the National Bank two main problems hampering economic growth: lending and rate.

Chairman of the National Bank Daniyar Akishev said that inflation for January-August 2018 was 2.9%, which is lower than the same period last year. Annual inflation in August slowed to 6% compared with 7.1% at the end of the previous year. According to the results of the population survey in August, the quantitative estimate of the expected inflation for the year ahead is 5.9%, practically equaling the level of the current annual inflation.

According to the estimates of the National Bank, in 2018 inflation will remain in the target corridor of 5-7%. However, in the last few months, the risks have increased that in the future inflation will decline more slowly than the National Bank estimated earlier.

"Inflation in 2019 will be formed near the upper boundary of the target corridor, which is defined in the corridor 4-7%, that is about 6%. This is due both to the influence of external factors and to the expansion of domestic aggregate demand. In this regard, it is necessary now to take additional measures to keep inflation in the target corridor," Akishev said.

Since the beginning of 2018, the base rate has been reduced from 10.25% to 9%. However, the National Bank does not exclude the tightening of monetary conditions until the end of 2018, if the estimates for inflation risks are confirmed.

It was also noted that in the currency market, the tenge rate from the beginning of the year to September 10 weakened by 13.8% and amounted to 378.11 tenge for $1. In addition to the fall in the Russian ruble from the beginning of the year by 22%, the tenge is influenced by the factors of considerable weakening of the currencies of developing countries against the dollar.

Akishev noted that the National Bank corrects the fall of the exchange rate, when the demand for the currency is much higher than the supply, but on the whole it does not impede the fundamental trends. At the current moment, this leads to volatility of the course, but on the long-term horizon it provides macroeconomic stability and the balance of payments. The current situation does not pose a threat to financial stability and the situation in banks.

Since September 10, 2018, the National Bank has changed the approach to the formation of the official tenge. Now the official rate is set based on the results of the main additional session with the timing of settlements on the Kazakhstan stock exchange. This approach is fully consistent with international practice. The results of yesterday's trading showed that the transition to a new calculation was carried out successfully and did not cause inconvenience to market participants.

After hearing the report of the National Bank chairman, the Prime Minister pointed to the National Bank on two main problems hampering economic growth: lending and rate.

"You talk about a normal situation, but when you look at the branches, then agriculture, construction, communications, trade – all in a minus. Credits are not issued. Loan issues decreased. All this has an impact on the growth of the economy. The long-term loans that you issue are lagging behind and the rates are very high. I ask you to pay attention to this," said Bakytzhan Sagintayev.

 

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