The Board of the National Bank of Kyrgyzstan decided to keep the discount rate (key rate) at 13 percent. The head of the Department of Communication and International Cooperation of the National Bank Ilyichbek Sultankulov told at a press conference.
According to him, the pricing environment in the external economic environment is characterized by a gradual slowdown in global inflation. This is facilitated by the persistence of tight monetary conditions in most countries of the world combined with a smooth decline in world prices in food markets. However, the dynamics of the core inflation indicator remains steadily at elevated values. All these factors against the background of continuing high uncertainty in the world cause a slower decline in global inflation.
A gradual inflation rate decline is registered in Kyrgyzstan. As of August 18, 2023 inflation in annual terms amounted to 9.4 percent, since the beginning of the year — 5.3 percent. Seasonal decrease in prices for fruits and vegetables, oils and fats contributes to the decline in the food inflation rate, while stable prices for non-food goods and services restrain the slowdown of inflationary processes.
«Consumer activity in the services sector makes the main contribution to the growth of the Kyrgyz economy. In January — July of this year, the real GDP growth of the republic amounted to 2.9 percent (excluding enterprises developing Kumtor mine — 4.3 percent). The conducted fiscal policy and growing volumes of consumer lending to the banking sector contribute to the expansion of public and private consumption, supporting domestic demand at a relatively high level,» Ilyichbek Sultankulov said.
He also noted that the measures taken by the National Bank contribute to maintaining a stable situation in the money and foreign exchange markets and are aimed at reducing inflation. The banking system is expanding its resource base and maintaining a high level of som liquidity, thus supporting the growth of lending to the economy.
«Despite a slight weakening, pro-inflationary risks persist in the short and medium term. Inflation expectations remain stable, including in connection with the current course of tariff policy,» the head of the Department of Communication and International Cooperation of the central bank said.
Given the emerging conditions, the National Bank decided to keep the size of the discount rate at 13 percent. The bank believes that the decision on the discount rate will contribute to further slowdown of domestic inflationary processes and achievement of inflation targets of 5-7 percent in the medium term.
The National Bank is constantly monitoring the current situation. In case of any risks, it does not exclude the possibility of making additional adjustments to the monetary policy.
The next scheduled meeting of the Board of the National Bank on the size of the discount rate will be held on October 30.
