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Investing.com - The National Bank of Kazakhstan is expected to raise its key interest rate by at least 100 basis points at its upcoming policy meeting on October 10, according to a recent Bank of America (NYSE:BAC) research note.
Bank of America analysts anticipate the Kazakh central bank will attempt a "one and done" approach with this rate increase, though they do not rule out additional hikes in November or early 2026. The move is primarily aimed at providing stronger policy support for the Kazakhstani tenge (KZT).
The tenge is projected to strengthen against the U.S. dollar as Kazakhstan implements expected fiscal consolidation measures in 2026. Currently, the USD/KZT exchange rate stands at 574.37, according to the report.
Bank of America suggests the National Bank might employ both verbal and physical market interventions to support the tenge if the USD/KZT exchange rate exceeds 550. The financial institution maintains its long position on the Kazakhstani currency through a non-deliverable forward (NDF) contract expiring on February 20, 2026.
The NDF position was opened when USD/KZT was at 570, reflecting Bank of America’s continued confidence in the tenge’s potential appreciation following the anticipated monetary policy tightening and fiscal reforms.
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