RS: NBS holds steady in December
NBS met our expectations at year-end, keeping its key rate unchanged at 5.75% in December. Due to still relatively high inflation, visible core inflation pressures, and heightened emerging market outflows at year-end we expected the NBS to remain on hold in December.
It seems likely that NBS will remain cautious in January as well, opting to wait and see what the new US administration puts in motion, given that possible introduction of tariffs could lead to higher global inflation. With expected gradual easing of inflation later in the year and de-escalation of geopolitical conflicts, overall global policy uncertainty should drop as well allowing for further key rate cuts. We expect a total of 100bp cuts in 2025, although risks are tilted towards less rather than more cuts.