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National Bank of Kyrgyzstan keeps discount rate at 5 percent

The Board of the National Bank of Kyrgyzstan kept the discount rate (key rate) at 5 percent. Website of the National Bank of the Kyrgyz Republic says.

Uncertainty about duration of the pandemic in the world persists. At the same time, a number of states are experiencing a faster than previously expected recovery in economic activity. However, in general, the global economy continues to be influenced by the negative consequences of the spread of COVID-19. World commodity markets show volatile price dynamics.

Against the background of the weakening of restrictive measures to prevent the spread of coronavirus infection in Kyrgyzstan, there has been some recovery in economic activity.

At the same time, the volumes of output in the main sectors of the economy remain in the negative zone. A decrease in the inflow of remittances to the republic and, against this background, more restrained domestic consumption, as well as a drop in investment in fixed assets, act as limiting factors for a more rapid recovery of the country’s economy.

Situation in the monetary sector is stable. The money market demonstrates activity of its participants in the short segment. Short-term money market rates fluctuate within the interest rate corridor established by the National Bank. The banking system maintains a high level of excess liquidity, which determines conducting of sterilization operations by the financial regulator. The volume of lending to the economy continues to grow, and the deposit base is showing steady growth.

«Taking into account the prerequisites for the development of the external environment and emerging internal economic conditions, the National Bank decided to keep the discount rate at the level of 5 percent. At the same time, the instruments of monetary policy in general will be aimed at stimulating the real sector of the economy,» the National Bank stressed.

The next meeting of the Board of the National Bank on the size of the discount rate will be held on November 30, 2020.