National Bank of Kyrgyzstan again keeps key interest rate at 9%
BISHKEK. Jan 28 (Interfax) - The board of the National Bank of Kyrgyzstan has decided to maintain the key (reference) interest rate at 9%, the bank said on its website.
Price dynamics in Kyrgyzstan remain moderate and are within the medium-term inflation target range of 5%-7%, the National Bank said. The annual inflation rate stood at 6.3% in December 2024. Increased domestic demand along with the impact of external conditions continue to be defining factors of current price dynamics in the country.
"The Kyrgyz economy grew 9% in 2024. Positive dynamics were observed in the main sectors of the economy, with the highest economic activity recorded in the services and construction sectors. The growth of real incomes and net individual money transfers into the country, as well as the expansion of consumer lending, support domestic demand," the bank said.
The monetary conditions maintained by the National Bank help maintain stability in the money and foreign exchange markets, thus limiting external inflationary risks for the economy. On the interbank money market, participants' moderate activity is due to the high level of excess liquidity in the banking system, the volume of which is actively managed by monetary instruments. The key indicators of financial and credit institutions show a sufficient level of resilience. Commercial banks continue to actively lend to the main sectors of the economy and expand their resource base.
"As before, external economic prospects are characterized by high uncertainty due to ongoing geopolitical factors. World food prices have shown rising dynamics in recent months, and international financial markets remain highly volatile. Inflationary pressure remains high in some of Kyrgyzstan's trading partner countries," it said.
Domestic inflation remains within the medium-term target range due to monetary policy. However, external factors are inflationary. Therefore, the decision was made to keep the key rate at 9%.
This decision aligns with the current macroeconomic conditions of the country and reflects the National Bank's policy regarding existing external risks, it said. It will also help maintain price stability in the country in the medium term and ensure macroeconomic resilience.
The National Bank will continue to assess the emerging external and internal economic conditions and will adhere to a balanced approach in its monetary policy. Should any risks to price stability arise, the National Bank does not rule out the possibility of adjusting its monetary policy.
The next scheduled meeting of the board of the National Bank of Kyrgyzstan regarding the interest rate will take place on February 24.
A rate of 9% per annum has been in effect since May 2024, when it was lowered from 11% per annum.