March 16, 2020 / 4:11 AM / 13 days ago

UPDATE 1-Kazakh cenbank holds key rate, to stick to tenge free float

(Adds details, context)

ALMATY, March 16 (Reuters) - Kazakhstan’s central bank kept its policy rate unchanged at 12.0% on Monday and said it would stick to a free floating exchange rate regime for the local tenge currency.

The bank said there was now a higher risk of inflation exceeding the 6% target range ceiling this year due the impact of the coronavirus, and that it has slashed its outlook for the average 2020 Brent crude price to $35 per barrel from $60.

The central bank hiked the policy rate by 275 basis points last week in response to the plunge in the price of oil, Kazakhstan’s main export, after a global oil producers’ pact to limit output collapsed.

It will next review the rate on April 27.

The tenge lost more than 6% of its value against the dollar last week despite the rate hike and central bank interventions. Kazakhstan declared a state of emergency on Sunday due to the coronavirus outbreak. (Reporting by Olzhas Auyezov; Editing by Himani Sarkar)

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