Kazakhstan eases interest rate to 8 pct
Güncelleme Tarihi:
AP
Oluşturulma Tarihi: Temmuz 09, 2009 00:00
ALMATY - Kazakhstan on Wednesday cut its key interest rate for the fifth time this year amid signs of easing inflation in Central Asia's largest economy.
The half-percentage-point cut is part of the Kazakh Central Bank's policy to gradually ease interest rates and comes as authorities seek to encourage borrowing and breathe life back into the struggling financial sector.
"In the light of developments on the financial market and the reduction of the annual inflation rate, the Central Bank has decided to set the official refinancing rate at 8 percent," the bank said in a statement. The cut will take effect Friday.
Under current economic conditions, inflation is unlikely to exceed 9 percent this year, down from 9.5 percent in 2008, the bank said. That marks a sharp drop from 2007, when inflation hit 18.7 percent.
Inflation in June was 0.4 percent, down from 1.2 percent in same month last year, the bank said.
A fall in global demand and prices for energy and mineral resources has had a severe effect on Kazakhstan's oil-fueled economy. Rapid growth has also been hit by excess reliance on foreign borrowing, which dried up amid the global financial crisis.
The economy was growing at an average annual rate of 10 percent until 2007 as oil prices soared. But the Economy Ministry now predicts GDP growth could drop to 1 percent this year, down from 3.1 percent in 2008.
"In the light of developments on the financial market and the reduction of the annual inflation rate, the Central Bank has decided to set the official refinancing rate at 8 percent," the bank said in a statement. The cut will take effect Friday.
Under current economic conditions, inflation is unlikely to exceed 9 percent this year, down from 9.5 percent in 2008, the bank said. That marks a sharp drop from 2007, when inflation hit 18.7 percent.
Inflation in June was 0.4 percent, down from 1.2 percent in same month last year, the bank said.
A fall in global demand and prices for energy and mineral resources has had a severe effect on Kazakhstan's oil-fueled economy. Rapid growth has also been hit by excess reliance on foreign borrowing, which dried up amid the global financial crisis.
The economy was growing at an average annual rate of 10 percent until 2007 as oil prices soared. But the Economy Ministry now predicts GDP growth could drop to 1 percent this year, down from 3.1 percent in 2008.