- Decision
- Maintain
- Rate change
- 0 bps
- discount rate
- 9%
The National Bank of the Kyrgyz Republic held its policy (basic) rate at 9.00 % from 28 January, judging that headline inflation—6.3 % y/y in December 2024 and 6.5 % as of 17 January—remains within the 5–7 % medium-term objective despite firm domestic demand and lingering external price pressures. The prevailing monetary stance, supported by active liquidity management amid high excess reserves in the interbank market, is aimed at preserving stable money and foreign-exchange conditions. Real GDP expanded by 9.0 % in 2024, underpinned by strong services and construction activity, rising household incomes, robust net remittance inflows and continued growth in consumer lending, while banking sector indicators remain sound. The Board highlighted elevated external uncertainty linked to geopolitical factors, recent increases in global food prices, high volatility on international financial markets and sustained inflationary pressures in key trading partners. It affirmed a balanced, data-dependent approach and signalled readiness to adjust policy should risks to price or macroeconomic stability intensify.
Rate evolution
The National Bank of the Kyrgyz Republic tightened policy by 275 basis points over the period, lifting the policy rate from 9.25% in July 2025 to 12.00% in February 2026, after an August pause and a January hold, and then kept it unchanged through August, most recently on August 24 with effect from August 25. Early decisions were driven by inflation above the 5-7% target, initially tied to seasonal food pressures and electricity tariff revisions but reinforced by strong growth, domestic demand and investment, while the Bank consistently flagged elevated external uncertainty from geopolitical tensions and volatile food prices.
It later stressed a shift in price pressures toward non-food goods and services, imported fuel and energy costs and secondary effects, and by February a stronger fiscal impulse, wider output gap and resilient consumer demand, which prompted tightening. In July, the Bank said restrictive monetary conditions remained necessary as inflation since the start of 2026 had reached 6.5%, or 11.3% in annual terms as of July 17, with food and fuel prices rising amid geopolitical tensions, volatile global commodity markets and risks to oil product supplies through the Strait of Hormuz. In August, it noted that consumer prices had risen 7.3% since the start of 2026 and annual inflation stood at 11.7% as of August 14, as higher fuel costs fed into transport and production expenses, global food price volatility lifted food prices, and domestic factors drove an 11.1% increase in service prices. With real gross domestic product growth at 11.1% in January-July, supported by construction investment and consumption, rising incomes and expanding credit, the Bank judged that restrictive conditions and active regulation of excess banking system liquidity remained necessary to limit secondary effects from external inflation and said it could adjust policy if risks to price stability emerge.