The Board of the National Bank of Kyrgyzstan decided to keep the discount rate (key rate) at the level of 7.5 percent. Website of the central bank says.
The National Bank said that the economies of the countries — trade partners of the Kyrgyz Republic continue to actively recover. But the growing inflation rate and the risks of emergence of more dangerous strains of coronavirus are adding uncertainty to return of the region’s economies to a sustainable growth path.
Economic activity is recovering at a moderate pace in Kyrgyzstan.
The restraining factor is the decline in production in the main sectors of the economy. Despite the growth in remittances to the country (+20.6 percent in January-August 2021), domestic demand is recovering more slowly.
«The current course of monetary policy has been continued. The situation in the money market is stable. Short-term interest rates declined and formed within the interest rate collar. Participants of mainly the short segment became more active in the interbank credit market. The banking system operates under conditions of a high level of excess liquidity. The positive dynamics of lending to the economy and the expansion of the deposit base of banks persist. Indicators of dollarization of deposits and loans are declining,» the statement says.
The situation in the domestic foreign exchange market is stable.
The National Bank of Kyrgyzstan carried out foreign exchange interventions to prevent sharp fluctuations in the exchange rate. At the same time, there are still risks of influence of external factors on the inflation rate in the country.
«Taking into account the prerequisites for the development of the external environment and internal economic conditions, the National Bank kept the size of the discount rate at 7.5 percent. In case of any risks, the National Bank does not exclude the possibility of making additional adjustments to the monetary policy. The bank regularly assesses external and internal factors influencing inflation and, depending on the economic situation, will take appropriate measures of monetary policy,» the bank noted.
The next meeting of the Board of the National Bank on the size of the discount rate will be held on November 29 this year.
