The Board of the National Bank of Kyrgyzstan decided to keep the discount rate at 9 percent. This decision comes into effect from July 30, 2024. The National Bank Chairman Melis Turgunbaev said.
According to him, inflation in Kyrgyzstan since May 2024 has remained in moderate values due to a decrease in the rate of growth of prices for food products and the impact of seasonal factor on prices.
Annual inflation in July amounted to 4.2 percent. In the structure of inflation: annual growth in food prices reached 0.6 percent, non-food products — 7.4 percent, services — 6.8 percent.
He added that the high consumer and investment activity of economic entities led to economic growth of 8.1 percent in the first half of 2024. GDP grew significantly due to an increase in the construction and services sectors. The growth of real incomes of the population and net inflow of remittances contributed to the expansion of domestic consumption.
Kyrgyzstan’s banking sector is resilient and highly liquid. Lending to the economy grew by 9 percent in the first half of 2024 mainly for consumer purposes.
A decline in short-term interest rates is observed in the interbank money market after the easing of the interest rate policy of the National Bank since the end of April 2024. The exchange rate remains flexible in the domestic foreign exchange market, which since April has led to an excess of supply of foreign currency over demand for it and strengthening of the national currency.
Melis Turgunbaev noted that external economic conditions remain uncertain against the background of geopolitical instability and high volatility in the global financial and commodity markets. World prices for food products show growth after a prolonged decline, and inflationary processes remain at a high level in the partner countries of the Kyrgyz Republic.
Assessment of external and internal factors of inflation indicates the formation of inflation rate by the end of the year in the range of 5 — 7 percent.
Taking into account the volatility of prices in the world markets and planned revision of tariff policy, the National Bank decided to keep the discount rate at the level of 9 percent to further reduce inflationary expectations of the population. This decision is aimed at maintaining price stability and macroeconomic sustainability.
The National Bank continues to carefully assess external and internal factors of inflation and adheres to a balanced approach in monetary policy. In case of emergence of risks, additional adjustments in monetary policy are possible.
- The next meeting of the Board of the National Bank on the issue of the discount rate is scheduled for August 26, 2024.
