Monetary policy of the National Bank of Kazakhstan in the context of cyclic economic development


  • Н. Кучукова
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The article explores the monetary policy of the National Bank of Kazakhstan in the context of cyclical
economic development. In recent years there has been a decline in the ranking of Kazakhstan in the
global competitiveness index, primarily in the position «Macroeconomic Environment» that covers such
important indicators as inflation, budget deficit and external debt, which characterize the stability and
predictability of the fiscal and monetary policy, as well as the state of the economy.
The purpose of this study is to develop recommendations to improve the effectiveness of monetary
policy, strengthen the supervisory functions of the National Bank of Kazakhstan regarding the activities
of second-tier banks and increase the responsibility of commercial banks’ leadership for their financial
Sustainable macroeconomic development is the basis for the development of financial markets that
stimulates the productivity and national competitiveness in the long run. At the same time, the global
competitiveness index is a practical tool for setting key tasks and assessing the effectiveness of the national
Based on the results of the conducted studies, key features and problems of the development of the
national economy are identified in the face of new challenges and threats, close integration and dependence
from the development of the world economy. Recommendations are proposed for improving the
efficiency of monetary policy in the context of cyclical economic development of Kazakhstan in order to
ensure the macroeconomic stability in an effort for Kazakhstan to achieve the strategic task of entering
top 30 developed countries.
The basis of the study is a systematic approach, a dialectical method of cognition, as well as logical
analysis and synthesis.
The results of the research demonstrate a high degree of dependence of the rates of financial market
development on the macroeconomic environment. All macroeconomic factors (fiscal and monetary policy,
structural and investment policy, strategy of public debt management, level of welfare and savings)
affect the stability and development trends of financial markets. Since financial markets are indicators of
the state of the economy, the formation of a stable and steadily developing macroeconomic environment
is an objective necessity both for improving Kazakhstan’s competitiveness and developing the country’s
financial market to ensure efficient access to financial resources.
The National Bank of Kazakhstan should move more quickly to increased risk-based supervision,
the aim of which is to stimulate the highly prudent policy of second-tier banks, as the financial regulator
was late with a real solution to the problems of the banking sector that piled up in the wake of the
global financial crisis of 2008-2009. For instance, 90% of the bad debt portfolio was issued by banks in the period from 2006 to 2015. The greatest abuse in the misuse of money by second-tier banks was
observed during this period. After the crisis of 2009, when banks lost the opportunity to attract loans
from abroad, they began to raise significant amounts of money from the quasi-public sector. The amount
of public funds on bank accounts within several years increased from 2.5 trillion tenge to 7 trillion tenge,
and banks used this money at their discretion without a balanced credit policy aimed at lending to the
real sector in order to achieve the strategic national task of accelerated economic and technological
modernization and entry into top 30 developed countries.
To address the above problems, specific recommendations were proposed to the Government and
the National Bank of Kazakhstan to reduce inflation and improve the banking sector.
Practical significance of the results of the work. The reduction in the rate of inflation, which is
achieved through the implementation of monetary and credit policy, is of great practical importance
for ensuring macroeconomic stability. In addition, reduced inflation contributes to the development of
businesses, since price stability helps entrepreneurs to more confidently decide on the issues of mediumterm
planning and financing of the real sector of the economy. Affordable lending should be the key to
mass entrepreneurship.