13:24, 31 января 2023, Bishkek - 24.kg news agency , Tatyana KUDRYAVTSEVA
The Board of the National Bank of Kyrgyzstan decided to keep the discount rate (key rate) at the level of 13 percent. The official representative of the National Bank of the Kyrgyz Republic Aida Karabaeva told at a press conference on Tuesday.
According to her, maintaining the key rate corresponds to the macroeconomic conditions of the country and reflects the policy of the National Bank regarding the existing risks in the economy. The current course of monetary policy is aimed at limiting pro-inflationary factors in the economy of Kyrgyzstan.
Annual inflation at year-end 2022 was 14.7 percent. As of January 20, 2023, the price increase was 1.2 percent.
In general, the dynamics of inflation develops within the framework of the medium-term forecast. Therefore, there is no need to change the trajectory of the discount rate.
«It is expected that the stabilization of the situation in the global energy and food markets will have an impact on the slowdown of inflation in the second half of this year. An additional internal source of pro-inflationary risks is the announced increase in the cost of a number of administered prices (tariffs),» Aida Karabaeva said.
She also stressed that the post-pandemic economic recovery has helped maintain economic activity at a high level in Kyrgyzstan. According to preliminary data, last year the growth of real GDP amounted to 7 percent. This is largely due to the growth in production volumes in the sectors of services, industry, agriculture and increased domestic demand. Support for domestic demand is also provided by the expansion of lending to the economy.
According to preliminary data, at year-end 2022, the growth of the bank loan portfolio amounted to about 12 percent.
«The situation in the money and currency markets remains relatively stable. Tactical monetary policy decisions are made in the context of a significant increase in excess liquidity in the banking sector,» the official representative of the National Bank said.
The central bank believes that the prospects for the economic development of Kyrgyzstan are still largely dependent on external economic factors, the dynamics of which is dominated by high uncertainty. Under these conditions, pro-inflationary risks persist. The cumulative effect of the monetary policy measures adopted earlier will help mitigate potential inflation risks. The further direction of the monetary policy will be formed taking into account the influence of the aforementioned factors and risks on the economic processes in the republic.
«The National Bank is constantly monitoring the evolving situation and, if necessary, will use additional tools and take appropriate measures to achieve the goal of ensuring price stability in the medium term,» Aida Karabaeva concluded.
The next scheduled meeting of the Board of the National Bank of the Kyrgyz Republic on the size of the discount rate will be held on February 27, 2023.