Kazakhstan central bank hikes key rate by 275 bp

Kazakhstan's central bank hiked its policy rate to 12.0% from 9.25% on Tuesday, governor Yerbolat Dosayev said, citing risks of pressure on the tenge exchange rate and inflation after the collapse of oil prices.

The bank also widened its rate band to +/-150 basis points from +/-100 basis points and Dosayev told a government meeting it stood ready to intervene on the foreign exchange market and take additional measures to ensure market stability. Dosayev said the drop in the price of oil, the Central Asian nation's main export, could cause a further deterioration of Kazakhstan's current account which posted a $5.5 billion deficit last year.