Abstract
The article examines the features and current state of monetary policy and transmission mechanism of the National Bank of Kazakhstan. The transmission mechanism is not a tool to achieve the goals set for the development of the modern economy. This mechanism is a set of interactions in economic processes through which the results of decisions or transactions in the framework of monetary policy affect the economy. In this regard, the article describes the level of inflation and its impact on the level of prices for goods and services. The situation with the use of the consumer price index to calculate inflation, calculated on the basis of the analysis of prices in the portfolio of consumer goods and services of the Ministry of National Economy of the Republic of Kazakhstan, is analyzed in detail. Macroeconomic and microeconomic factors, reflecting the viable direction of the monetary policy of the Republic of Kazakhstan, affect the level of the consumer price index. To make decisions, the NBRK conducts research to determine inflation forecasts. Inflationary expectations make it possible to assess the possible impact on the economy. In this context, the article states that the NBRK's inflation target will be achieved through the following channels (base rate, exchange rate and money supply). The conclusion is based on the fact that, given the global pandemic around the world, one can see the NBRK's expansionary monetary policy and decisions to lower the base rate, increase the money supply and stabilize the currency.
Highlights
11th of November 2019 President of Republic of Kazakhstan Tokaev K. signed a decree on reorganization of National Bank of Republic of Kazakhstan by separating the divisions responsible for regulation of capital markets and banks
NBRK uses Consumer Price Index (CPI) to formulate inflation, which is calculated through the analysis of prices in the basket of consumer goods and services by the Ministry of National
Many macroeconomic and microeconomic factors affect the level of CPI, which makes this indicator a viable benchmark for the monetary policy of Republic of Kazakhstan
Summary
11th of November 2019 President of Republic of Kazakhstan (hereinafter – RK) Tokaev K. signed a decree on reorganization of National Bank of Republic of Kazakhstan (hereandafter – NBRK) by separating the divisions responsible for regulation of capital markets and banks. The new governing body is called the Agency of the RK for Regulation and Development of Financial Market(hereinafter – ARDFM). NBRK left with so called «standard» central bank responsibilities of management of monetary policy of RK with priorities on controlling base rate, exchange rate and money supply. The NBRK is targeting the inflation rate.
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