Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Kazakhstan To Curb Bank Rates

Kazakhstan plans to prohibit banks from unilaterally raising interest rates on mortgage loans to individuals for three years in a bid to stabilize the country's property market.

The Agency for Financial Supervision is proposing the draft law that will cover new and outstanding loans, Mukhtar Bubeyev, the head of bank supervision department at the regulator, said last week.

Kazakh President Nursultan Nazarbayev asked the pro-government parliament majority party Nurotan on Oct. 13 to approve the law on financial stability in a month. He also ordered the government to fund the $10 billion bailout from the National Oil Fund to ease credit and help prevent the collapse of the former Soviet republic's construction industry.

"We need clear understanding by individuals of the measures for financial stability and the nation's well-being," Nazarbayev said on Oct. 13.

"We can overcome difficulties of such scale if our nation is united."

The $100 billion Kazakh economy grew an average of 10 percent per year from 2000 to 2007 as the price of energy and commodities rose, sparking a construction boom. It advanced 5.4 percent in the first half of 2008 as banks curtailed lending because of the global credit crunch.

The new law also is expected to provide additional capitalization for banks in exchange for stakes in their equity capital, Bubeyev said.