National Bank of Kyrgyzstan hikes policy rate from 11% to 12%
MOSCOW. Feb 24 (Interfax) - The National Bank of Kyrgyzstan has raised its key policy rate from 11% to 12% per annum, the regulator said on its website.
It said the external economic environment remained uneven and in a state of heightened uncertainty. Global food rice growth is slowing but inflation in Kyrgyzstan's main trading partners remains elevated. Given the significant share of imports in the consumer basket, domestic prices remain susceptible to changes in the external environment.
"The price outlook largely depends on the stability of global supply chains and trade flows, risks to which persist amid geopolitical tensions and global economic fragmentation. These conditions mean a balanced approach to monetary policy must be maintained to ensure price stability in the republic," the National Bank said.
Consumer prices in Kyrgyzstan rose 1.8% in the period January 1-February 13 and annual inflation was 9.6%. The inflation trajectory is generally as the regulator expected, but price growth remains uneven across the main components of the consumer basket. Food prices are rising moderately due to price stabilization for certain products, however growth remains elevated in services and non-food goods due to secondary effects of external conditions and intensification of domestic demand factors.
Kyrgyzstan's economic growth remains high with GDP up 9% year-on-year in January. The National Bank said that as previously, economic activity had accelerated in the services and construction sectors. Capital investment remains high, supporting the expansion of infrastructure projects. Growth in real incomes and consumer lending are supporting domestic demand. These factors combined are creating additional inflationary impetus. Monetary conditions continue to support the national currency's purchasing power and create a stable price environment.
The interbank money market is steady and the BIR rate is below the National Bank's interest rate corridor, reflecting the balance of supply and demand for short-term money market resources amid excess liquidity in the banking system.
"The currency market remains stable. Foreign exchange interventions are carried out solely to smooth out sharp exchange rate fluctuations. The banking sector is proving to be resilient. Bank deposits rose 46.2% in 2025 to 865.9 billion som, reflecting confidence in the banking system and increased propensity for households to save. The loan portfolio of commercial banks grew 48.8% in 2025 to 507 billion som, reflecting activity in the real sector. The medium-term inflation trajectory will be determined by the balance of external and internal conditions. Against the backdrop of pro-inflationary factors in the economy, due partly to the expansion of positive fiscal momentum and the widening gap between GDP growth and consumer demand, a tightening of monetary conditions is currently needed to create sustainable conditions for inflation to slow. In connection with this, the National Bank's key rate has been raised to 12%," the regulator said.
The National Bank said it remained committed to a balanced approach to monetary policy and continued to assess prevailing external and internal inflation factors. The National Bank could adjusting its monetary policy should any risks to price stability arise.
The regulator's next rate-setting meeting is scheduled for April 27.
The key policy rate has been 9% per annum since May 2024, when it was lowered from 11% per annum. The rate was hiked to 9.25% in July 2025 amid inflationary external factors and price volatility in global food and commodity markets, then to 10% in October and to 11% in November.
