The National Bank of Kazakhstan has raised its benchmark interest rate by a full percentage point to 17 per cent as the country’s currency creaks under the pressure of low oil prices.

According to Financial Times, the decision marks the first monetary policy meeting since Kazakhstan replaced its national bank governor in November, amid fears the Central Asian economy, which depends on oil for 60 per cent of its exports, was facing an economic crisis.

Policy meetings have been delayed several times since then, with traders saying that the bank was squeezing liquidity in the tenge money market in order to support the currency.

[caption id="attachment_34676" align="alignnone" width="900"] Statistics by Financial Times[/caption]

Managing interest rates is a relatively new monetary policy tool for Kazakhstan, with the central bank setting its first benchmark rate last September, and analysts say it is still far from efficient. The central bank will aim to manage rates within a band of 15-19 per cent, it said.

Photo: alau.kz