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Increased demand for dollars in Kyrgyzstan caused by external factors

A slight excess of demand for dollars has been observed in the domestic foreign exchange market of the country since the end of October 2018 that was primarily caused by the external adverse background. The National Bank of the Kyrgyz Republic informed 24.kg news agency.

According to it, currently, there is a global trend towards strengthening of the U.S. dollar, including in the countries — trade partners of Kyrgyzstan. This is due to the expected additional sanctions against Russia and the policy pursued by the U.S. Federal Reserve System.

From October 25 to November 20, the official exchange rate of the U.S. dollar to the Kyrgyz som grew by 0.8 percent — from 69,2744 to 69.83 soms.

«Situation in the domestic foreign exchange market of Kyrgyzstan is stable now. Since the beginning of 2018, the official exchange rate of the U.S. dollar to som has increased by 1.4 percent — from 68,8395 to 69.83 soms,» commented the National Bank.

At the same time, the National Bank of the Kyrgyz Republic believes that the situation in the foreign exchange market does not cause concern. But it should be remembered that Kyrgyzstan is a country with a small and open economy, prone to various external shocks. In addition, the domestic foreign exchange market, as well as the economy as a whole, is sensitive to the changes taking place in the countries — its major trading partners.

«The National Bank constantly monitors the situation both in the external financial and in the domestic foreign exchange markets, and, if necessary, takes measures. For example, in order to avoid sharp fluctuations in the exchange rate, currency interventions are conducted, and within the framework of supervisory functions, constant monitoring of the activities of commercial banks and exchange offices on the observance of legislation in terms of currency operations is carried out. This helps prevent panic and excitement in the foreign exchange market and, as a result, ensure macroeconomic stability,» the National Bank of the Kyrgyz Republic summed up.