AKIPRESS.COM - Kazakhstan’s central bank cut its key interest rate for the first time since introducing it last year as policy makers look to curtail gains in the tenge and inflation risks subside, Bloomberg reported.

The base rate, set as the new benchmark after the central bank abandoned its currency peg in August, was decreased to 15 percent from 17 percent, policy makers in Almaty said in a website statement on Thursday. One of five economists surveyed by Bloomberg forecast the move, with three predicting no change and another seeing a cut to 16 percent.

“The risks of higher inflation from the side of aggregate demand are assessed as insignificant,” the central bank said in the statement. “The level of economic activity remains low.”

The economy of the second-largest energy producer in the former Soviet Union is at risk of its first annual contraction since 1998, with the Kazakh currency’s rebound prompting the central bank to intervene in the market to buy dollars. While the tenge has stabilized after the world’s second-worst performance last year, currency weakness has fed into inflation, sending annual price growth to 16.3 percent in April, the fastest in eight years and more than double the central bank’s target.