INFLATION TARGETING OF THE NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN

Abstract

The article presents the results of achieving a stable level of inflation in the medium term, which is a fundamental factor in sustainable economic growth. Since 2015, the National Bank has been pursuing monetary policy in the inflation targeting regime with a floating tenge exchange rate, hence inflation targeting is a monetary policy regime in which price stability is the ultimate goal. An important role in the inflation targeting regime is played by the interest rate channel, through which the central bank's interest rate policy affects market rates with further transfer to the consumer, savings, and investment behavior of the population, and, ultimately, to inflationary processes. The analysis shows that the dynamics of inflationary processes in Kazakhstan is significantly influenced by the import of goods, the share of which in consumption has not changed for several years. Thus, over the past 5 years, the share of imports in the consumption of consumer goods has fluctuated on average within 33-42%. The largest number of imported goods can be traced in the consumption of non-food products, the share of which increased from 63% in 2015 to 93% in 2019. At the same time, the share of imports in food consumption increased from 16% in 2015 to 18% in 2019.