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National Bank of Kyrgyzstan keeps discount rate at 4.25 percent

The National Bank of Kyrgyzstan kept the discount rate at 4.25 percent. The decision was made by the Board of the bank the day before.

Prices reportedly show a moderate growth in Kyrgyzstan. Economic activity persists in the real sector. An increase in production is observed in all major sectors of the economy, mainly in industry. At the same time, there has been a trend towards decrease in remittances to the country, which creates risks for weakening of domestic demand.

«The monetary sector is characterized by continued positive trends. Stimulating direction of the current monetary policy contributes to an increase in lending to economy and a gradual decrease in the cost of credit resources for consumers. The resource base of commercial banks is expanding. The interbank market of credit resources shows an increase in the activity of its participants. Short-term rates are close to the key rate on the money market, and are in the range of the interest rate collar established by the National Bank,» the statement says.

The National Bank continues to sterilize excess liquidity. As of today, there is a slight decrease in its level in the banking system.

The situation is stable in the domestic foreign exchange market. Taking into account assessments of development of the external environment and internal conditions, inflation in the Kyrgyz economy in the medium term will remain within the framework of the monetary policy target of 5-7 percent and it will be at low values against a stable external inflation background this year.

«The National Bank continues to assess internal factors influencing inflation; special attention is paid to assessing the effect of the current situation with the arid climatic conditions of the summer period. Depending on the economic situation, the National Bank will take appropriate monetary policy measures. In case of risks in the internal and external environment, the National Bank may consider the possibility of adjusting the current direction of monetary policy,» the National Bank said.

The next meeting of the Board of the National Bank on the discount rate issue will be held on September 30, 2019.