Banks now face increased requirements for reserved funds due to a move by the National Bank.
Kazakhstan Increases Minimum Reserve Requirements (MRR) to Boost Anti-Inflation Efforts
The National Bank of Kazakhstan has announced a significant change to the Minimum Reserve Requirements (MRR) for banks operating in the country. The updated MRR, effective from July 25, 2025, aim to enhance the effectiveness of anti-inflation efforts and improve monetary policy transmission.
The new MRR for tenge (local currency) obligations will be set at 3.5% and 5%, while for foreign currency obligations, the requirements will be 10% and 15%. These changes are part of a broader effort to create a favorable environment for balanced and sustainable economic growth in Kazakhstan and reduce inflation to 5%.
The decision to amend the MRR mechanism was based on an analysis of the international experience of applying MRR by central banks in the EAEU, Central Asia, and the Caucasus. The National Bank also studied MRR levels in countries outside Kazakhstan.
The banking sector in Kazakhstan will adapt to the changes in MRR by increasing the norms in stages over a year. This gradual approach is intended to ensure a smooth transition and minimize potential disruptions to the financial system.
Regarding comparisons with other countries in the Eurasian Economic Union (EAEU), Central Asia, and the Caucasus, no specific updated MRR figures are available for the Kyrgyz Republic and other EAEU countries or the Caucasus nations. As a result, a detailed comparison cannot be made based solely on the provided information.
However, it is worth noting that Kazakhstan’s MRR increase, particularly the high foreign currency reserve ratios of 10%-15%, is relatively stringent. This stringency is part of efforts to control liquidity and currency stability given recent challenges such as tenge depreciation pressures linked to oil price fluctuations and regional geopolitical factors.
In summary, the updated MRR for banks in Kazakhstan serve as monetary tightening, aiming to strengthen anti-inflationary measures and improve monetary policy tools. A stable and low inflation rate is a guarantee of preserving the purchasing power of the tenge. The changes also aim to bring Kazakhstan's MRR levels closer to those of other countries in the region.
The National Bank of Kazakhstan is increasing the Minimum Reserve Requirements (MRR) for both tenge and foreign currency obligations. The new MRR for tenge obligations will be set at 3.5% and 5%, while for foreign currency obligations, the requirements will be 10% and 15%. These changes are part of a broader effort to improve monetary policy transmission and create a favorable environment for balanced and sustainable economic growth in Kazakhstan.
