The Board of the National Bank of Kyrgyzstan decided to keep the discount rate (key rate) at 13 percent. Official representative of the National Bank of the Kyrgyz Republic Aida Karabaeva announced at a press conference.
According to her, the National Bank monitors trends in the development of the economic situation in the internal and external environment. Based on this the decision on the discount rate was made. She also noted that the annual inflation rate in Kyrgyzstan continues to slow down. As of October 20, annual inflation was 9.2 percent, down from 14.7 percent in December 2022. At the same time, since the beginning of the year, the general price level in the country has increased by 6.7 percent.
«The food component in the structure of the consumer price index is decreasing. However, prices for services and non-food products remain at the same levels, reflecting the influence of previously established and emerging inflation factors. Including increases in administered prices and tariffs have a certain impact on the level of inflation,» said Aida Karabaeva.
In January — September 2023, real GDP growth amounted to 4.2 percent (excluding Kumtor — 5.9 percent). It is worth noting here that the growth of consumer activity in the services sector makes the greatest contribution to economic growth. Domestic demand remains elevated. It is supported by fiscal policy measures and the growth of consumer lending in the banking sector.
The current course of monetary policy provides conditions for expanding the resource base of commercial banks, which supports lending to the real sector of the economy. The deposit base of banks for nine months increased by 21 percent and amounted to 411 billion soms, the loan portfolio increased by almost 20 percent and amounted to 244.3 billion soms.
«The measures taken by the National Bank to limit the strengthening of monetary factors of inflation keep the situation in the interbank money and domestic foreign exchange markets relatively stable. The National Bank of the Kyrgyz Republic, following the floating exchange rate regime, takes part in foreign exchange trading only to prevent sharp fluctuations in the exchange rate. The total volume of interventions for the sale of foreign currency since the beginning of the year on the domestic foreign exchange market have amounted to $655.7 million,» Aida Karabaeva said.
At the same time, the official representative of the National Bank noted that due to the continued high uncertainty in the world and the uneven recovery of the global economy, the slowdown in global price growth may take a longer time. At the same time, such internal factors as indexation of tariff policy keep inflation expectations stable.
«Therefore, the decision to keep the National Bank’s discount rate at 13 percent will continue to have a restraining effect on the currently existing inflation risks. It will help slow down inflation processes and return the inflation rate to target values of 5-7 percent in the medium term,» Aida Karabaeva concluded.
The next scheduled meeting of the Board of the National Bank on the issue of the discount rate will be held on November 27, 2023, taking into account updated forecasts and assessments of key macroeconomic indicators.
