Kazakhstan cut its key interest rate by half a percentage point Wednesday to 8.5 percent as soaring inflation eases in Central Asia's largest economy.
The cut was the fourth so far this year and comes as authorities try to boost borrowing and reinvigorate the struggling financial sector.
This decision comes "in light of developments on the financial market and the reduction in the annual inflation rate," the central bank said in a statement.
The bank said inflation was unlikely to exceed 9 percent this year, down from 9.5 percent in 2008. That marks a stark drop from 2007, when inflation hit 18.7 percent.
Analysts believe a further easing of inflationary pressures would likely lead to further rate cuts.
A fall in global demand and prices for energy and mineral resources has had a severe effect on Kazakhstan's oil-fueled economy. Rapid growth has also been hit by excess reliance on foreign borrowing, which has dried up amid the global financial crisis.
The economy was growing at an average annual rate of 10 percent until 2007 as oil prices soared. But the Economy Ministry now predicts GDP growth could drop to 1 percent this year, down from 3.1 percent in 2008.
Russia's central bank earlier this month cut its key interest rate by half a percentage point to 11.5 percent _ the third cut since April.
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