The Board of the National Bank of Kyrgyzstan decided to keep the discount rate (key rate) at 13 percent. Deputy Head of the Department of Communication and International Cooperation of the National Bank of the Kyrgyz Republic Ilyichbek Sultankulov announced at a press conference.
According to him, the monetary policy measures of the National Bank contributed to the downward trend of inflation. The annual inflation rate is gradually declining — in November 2023 it was 8 percent, which is 6.7 percent lower than the figure at the beginning of 2023.
«In the structure of inflation, a steady slowdown is observed in the food group of goods, the price growth of which, taking into account temporary measures on state regulation of prices for some goods, in annual terms decreased from 15.8 percent at the beginning of 2023 to 3.9 percent in November 2023. At the same time, prices for non-food goods and services remain at the same levels, reflecting the effect of tariff policy measures and the observed increased domestic demand,» Ilyichbek Sultankulov said.
The economy of Kyrgyzstan is demonstrating growth dynamics: real GDP growth in January — October 2023 amounted to 4.5 percent, excluding Kumtor — 6.5 percent. The main contribution comes from strong activity in the services and manufacturing sectors. Growing domestic consumption is due to the continued increase in consumer lending and rising real wages.
The trends observed since the beginning of this year in the monetary sector have continued. Short-term money market rates have a common direction with the dynamics of the key rate and continue to remain within the interest rate collar established by the National Bank. The banking system has sufficient liquidity both in soms and in foreign currency.
The situation on the domestic foreign exchange market remains stable.
«The current price environment with lower prices on world food markets has a favorable impact on domestic prices for certain goods in the consumer basket. At the same time, the continuing high uncertainty and heterogeneity in the external environment associated with geopolitical risks still remain pro-inflationary factors for the economy of Kyrgyzstan,» the National Bank’s representative noted.
The National Bank emphasizes that the monetary policy measures taken help minimize the negative impact of external and internal factors on inflation processes in the country. Taking into account the remaining factors in the country’s economy, including inflation expectations and the stable dynamics of core inflation, it was decided to keep the discount rate at 13 percent. The bank believes that this will help achieve target inflation levels of 5-7 percent in the medium term.
«The National Bank constantly monitors the developing situation both in the external environment and in the domestic economy. If any risks arise, the National Bank does not exclude the possibility of making additional adjustments to the ongoing monetary policy,» Ilyichbek Sultankulov concluded.
