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National Bank of Kyrgyzstan keeps discount rate at 13 percent

The Board of the National Bank of Kyrgyzstan decided to keep the discount 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, taking into account which the decision was made. The annual inflation rate in Kyrgyzstan continued to decline, with annual inflation at the end of 2023 amounting to 7.3 percent. Based on the results of last year, economic activity in the country remains high.

«The growth rate of real GDP at the end of the year amounted to 6.2 percent due to the largest contribution from the service sector and manufacturing industry. At the same time, domestic demand remains elevated, supported by growing rates of consumer lending, rising wages and growing inflows of remittances. The ongoing monetary policy helps strengthen the saving behavior of the population,» Aida Karabaeva said.

According to preliminary data, in 2023 the deposit base increased by 27.3 percent and amounted to about 431.3 billion soms.

The banking sector continues to actively lend to the real sector. The volume of the loan portfolio last year increased by 26.3 percent and amounted to 257.8 billion soms. The National Bank believes that the main performance indicators of financial and credit organizations demonstrate a sufficient margin of safety. This allows to maintain the stability of the banking system.

Commercial banks have sufficient liquidity in national currency. The domestic foreign exchange market remains relatively stable.

In 2023, the National Bank of the Kyrgyz Republic conducted 14 interventions to sell foreign currency for $655.7 million.

«The decision of the National Bank to keep the discount rate at 13 percent will contribute to a further slowdown of inflation processes in the republic and keep inflation within the target values of 5-7 percent in the medium term. The National Bank will continue to monitor the developing situation both in the external environment and in the domestic economy. If any risks arise, the central bank does not exclude the possibility of making additional adjustments to the ongoing monetary policy,» Aida Karabaeva concluded.

The next scheduled meeting of the board of the National Bank of the Kyrgyz Republic on the issue of the discount rate will be held on February 26.