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. Last Updated: 07/27/2016

Kazakhstan Raises Key Interest Rate

Kazakhstan's central bank on Monday raised the key interest rate by 2 percentage points in an effort to curb inflation, which accelerated to its highest in almost eight years last month.

The central bank raised its benchmark refinancing rate to 11 percent from 9 percent on Dec. 1, the bank said Monday in an e- mailed statement.

Inflation quickened to an annual 17.5 percent in November, the highest level since March 2000, when it reached 20.6 percent.

Kazakhstan, the second-biggest energy producer in the former Soviet Union, after Russia, is trying to curb prices as revenue from commodity exports pushes up wages and investment. Kazakh banks boosted loans after economic growth of 10 percent a year since 2000, fueled by record-high oil and natural gas prices.

"The bank decided to increase the refinancing rate under the conditions of accelerating inflation and significant growth of profitability at the interbank money market,'' the central bank said Monday.

The Kazakh inflation rate quickened to a record level for the third consecutive month this year, led by rising food prices.

Kazakh Prime Minister Karim Masimov on Oct. 22 told producers to "cut speculation on the food market" and ordered the Trade and Industry Ministry to buy food for state stocks to reduce growth.

"The refinancing rate increase is, theoretically, the proper step, but there might be more government participation in controlling prices by, for instance, decreasing the costs of fuel, Kanat Berentayev, deputy director of the Almaty-based Public Policy Research Center, said by telephone.