The Board of the National Bank of Kyrgyzstan decided to raise the discount (key) rate by 150 basis points to 10%, Report informs, citing the website of the country's central bank.
The National Bank notes that Kyrgyzstan’s economy continues to recover from the crisis related to the spread of COVID-19. The persistence of unfavorable epidemiological situation, together with the growth of geopolitical risks in the world are the prevailing factors of the negative impact of the external environment on economic processes within the country, including the dynamics of consumer prices.
Given the overall impact of geopolitical risks on all countries in the region, the terms of trade of the Kyrgyz Republic have not undergone significant changes. However, high uncertainty in global financial markets, formed against the background of growing geopolitical risks, forms additional inflationary pressure in the country.
"The cycle of tightening monetary conditions continues amid measures taken by the National Bank to contain the monetary component of inflation and minimize external economic shocks. At the same time, the situation on the money market remains stable. Short-term rates in the interbank market are rising and are formed within the interest rate collar set by the National Bank," the statement reads.
The key performance indicators of financial and credit institutions show a sufficient margin of safety. This allows to maintain stability of the financial and banking system.
The next meeting of the Board of the National Bank on the size of the discount rate will be held on April 25, 2022.