Consumer prices in Kazakhstan increased by 17.6 % y/y in August, easing slightly from a 17.7% hike in July, the State Statistics Committee said on September 1.

In July inflation accelerated to its highest level since the devaluation of the tenge in August 2015, when it was allowed to float freely. Despite the high inflation rate, the Kazakh central bank cut its key interest rate by a cumulative 400 basis points (bp) this year. At its latest meeting on August 15, however, the bank kept the benchmark on hold at 13% saying further rate cuts will depend on actual inflation, inflation expectations and the tenge's exchange rate. The bank has said it still expects inflation to gradually ease to come close to its target of 8% by the end of the year.

On a monthly basis, consumer prices edged up 0.2% in August, slowing down from the 0.5% rise seen in July.

Prices of foodstuffs went down by 0.4% m/m and up by 15.7% y/y in August and were higher by 5.2% compared to their level in December 2015. Prices of non-foodstuffs rose by 0.9% m/m and 28.83 y/y and of services by 0.2% m/m and 9.8% y/y.

Producer prices for industrial goods went down by 0.8% m/m and 29% y/y in August and were 14.4% higher than in December 2015. Producer prices increased by 12.8% in the mining sector in January-August and by 15.4% in the processing sector. Prices of industrial services stood unchanged on the monthly basis in August.