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Discount rate of National Bank remains unchanged – 5 percent

The Board of the National Bank decided to keep the discount rate unchanged — 5 percent, the Deputy Chairman of the National Bank Nurbek Zhenish said today at a press conference.

According to him, the decision was made on the eve at the board meeting. It is based on the current situation in the economy and medium-term forecasts. Thus, inflation in Kyrgyzstan continues to show moderate dynamics within the limits expected by the National Bank. It tends to approach the lower boundary of the target benchmark of monetary policy at 5-7 percent.

As of September 15, 2017, inflation in Kyrgyzstan comprised 3.2 percent. Its main factors as before are the gradual recovery of domestic demand and the dynamics of prices for imported goods.

The domestic foreign exchange market remains stable. Since the beginning of the year, the national currency has strengthened against the dollar by 1.1 percent. In September, the National Bank didn’t hold interventions.

«Monetary conditions continue to support measures to stimulate the real sector of the economy. The country’s banking system has a sufficient level of excess liquidity in the national currency. Short-term money market rates in national currency continue to fluctuate within the percentage corridor set by the National Bank. There is a decrease in interest rates on loans to end borrowers and expansion of lending. So, since the beginning of the year, interest rates on loans in the national currency have decreased from 27 to 19 percent,» Nurbek Zhenish said.

According to the current forecasts of the National Bank, taking into account the ongoing recovery of domestic demand, balanced forecasts for production in the country’s agriculture and price dynamics in international commodities markets, the value of inflation in the coming period will approach 5-7 percent.

«In these conditions and in the absence of external and internal inflationary risks, this level of the National Bank’s discount rate will give opportunity to further support the measures to stimulate the economy,» concluded Nurbek Zhenish.

The decision made means that the discount rate remains unchanged for 11 months. The next meeting of the Board of the National Bank on the issue of the discount rate will be held on November 27, 2017.

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