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Discount rate of National Bank of Kyrgyzstan not to change in 2018

Board of the National Bank of Kyrgyzstan kept the discount rate at the level of 4.75 percent. Website of the National Bank of the Kyrgyz Republic says.

Inflation background in Kyrgyzstan is reportedly stable and the third quarter in a row demonstrates a low increase in the general price level. Economic activity in the country is supported by a positive contribution of all sectors of the economy except for industry, information and communications sphere.

The main factors of the growth in domestic demand are still the increase in real wages and the positive dynamics in the inflow of remittances into the country.

«According to the National Bank’s estimates, in the medium term, it is assumed that external economic conditions will be the most significant factor in the development of the Kyrgyz economy,» the report says.

Monetary conditions in Kyrgyzstan are stimulating. Basically, the interest rates of the money market are within the corridor established by the National Bank. There is an increase in the interbank credit market, accompanied by an increase in the number of its participants.

«Maintaining of soft monetary conditions causes expansion of the loan portfolio and an increase in the deposit base of commercial banks. The banking system is currently operating in conditions of excess liquidity, and therefore the National Bank continues to sterilize it. In general, the domestic foreign exchange market is stable and does not cause pro-inflation risks,» the National Bank said.

Taking into account all the factors, the National Bank of the Kyrgyz Republic decided to keep the discount rate at the level of 4.75 percent.

However, if concerns about increasing sanctions pressure on the Russian economy are justified and lead to a change in the situation in the region, the National Bank does not exclude the possibility of adjustments to the monetary policy being pursued.

The next meeting of the Board of the National Bank on the discount rate will be held on December 24, 2018.