Kyrgyzstan's central bank keeps discount rate at 12%

BISHKEK. April 28 (Interfax) - The board of the National Bank of Kyrgyzstan (NBKR) decided to leave its discount rate unchanged at 12%, the NBK said in an official statement.

Current inflation processes in Kyrgyzstan are being driven by both external and internal factors, but external conditions continue to have the most impact on inflation in the country, the NBK said.

Geopolitical tensions in the world and high global uncertainty have pushed up prices on world food and commodity markets, the NBKR said, citing the growth of world prices for grains, vegetable oil and energy resources in the past two months amid the escalation of the conflict in the Middle East.

An additional factor is inflation in countries that are Kyrgyzstan's main trade partners, which is reflected in the price of imported goods.

"Higher prices for imported products, as well as logistics costs due to changes in global supply chains are putting pressure on domestic prices. Inflation in Kyrgyzstan, as of April 17, amounted to 3.9% since the start of 2026 (11.3% in annual terms). In the structure of the annual CPI figure there is a mixed dynamic of prices for the main product groups: the food component rose 10.8% in price, prices for nonfood goods increased by 9.2%, tobacco and alcohol products by 8.9%, but there were high rates of price growth in the service group, at a level of 17.2%," the bank said.

Domestic demand is being supported by the consumer activity of households amid the growth of wages and money transfers. Economic activity on the whole is staying at a high level and the country's real GDP grew by 10.1% in the first quarter of 2026, with services, industry and construction continuing to make the main contribution to growth, the NBKR said.

The NBKR continues to maintain tight monetary conditions intended to ensure price stability and set the stage for bringing inflation back to the target level of 5-7% in the medium term.

"The monetary policy measures being taken and active government regulation of prices continue to have a restraining influence on inflation. And the relatively stable exchange rate dynamic of the national currency is keeping the inflation expectations of economic agents and households within moderate limits," the NBKR said.

"The National Bank continues to monitor and assess external and internal inflation factors. The future inflation dynamic in the country will be determined in large part by external conditions, particularly the price situation on world food and commodity markets. In this context, the nature and duration of the situation in the Middle East will be particularly important," the bank said.

"Based on assessments of the balance of inflation factors, it is currently necessary to maintain tight monetary conditions to establish sustainable prerequisites for the slowdown of inflation. Therefore the National Bank's discount rate has been kept at 12%," the NBKR said.

If any risks for price stability emerge, the NBKR said it will respond promptly to risks of an inflationary nature. The NBKR's next scheduled meeting on the discount rate will be held on May 25.

The NBKR kept its discount rate at 9% for more than a year after cutting it from 11% in May 2024, but in July 2025 it raised it to 9.25%, citing pro-inflationary external factors and the volatility of prices on global food markets. The rate was then raised to 10% last October, 11% in November and 12% in February 2026.

The official exchange rate for April 28 is KGS87.4307/$1.