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National Bank leaves discount rate unchanged - five percent

The Board of the National Bank of Kyrgyzstan has kept the discount rate at five percent. The website of the National Bank of the Kyrgyz Republic says.

Inflation rate in Kyrgyzstan remains within moderate limits. As of February 16, 2018, its annual value was 3.4 percent.

The dynamics of inflation caused by relatively stable prices in the world food markets and the restoration of consumer demand in the country.

"The annual rates of growth in prices for the food goods are slowing down. Rise in prices for communication services and increased excise taxes on individual goods in early 2018 contributed to non-food inflation. The assessment of inflation factors characterizes the moderately stable price dynamics within the medium-term monetary policy benchmark of 5-7 percent," the report said.

Strengthening of the growth factors in the economies of the trade partner countries causes an increase in external demand and the inflow of remittances to Kyrgyzstan. Against this background and together with the restoration of domestic demand, there is an increase in economic activity in the country.

The domestic foreign exchange market remains stable. Since mid-January 2018, an excess of supply of foreign currency over its demand is observed.

"The preservation of the stimulating monetary policy during 2017, aimed at supporting the growth of the economy, manifested itself in the reduction of market interest rates on loans and expansion of lending volumes. Improvement of the instruments of monetary policy contributed to the activation of the interbank market. Short-term rates in national currency continue to fluctuate within the percentage corridor set by the National Bank. In these conditions, keeping of the discount rate will allow further to stimulate the real sector of the economy," the statement says.

The next meeting of the Board of the National Bank on the size of the discount rate will be held on March 26, 2018.