- Decision
- Maintain
- Rate change
- 0 bps
- discount rate
- 9%
The Board of the National Bank of the Kyrgyz Republic on 26 May 2025 left the discount (key) rate unchanged at 9.00 percent from 27 May, judging that annual inflation, at 7.7 percent in mid-May after a 2.9 percent rise year-to-date, remains broadly in line with the 5-7 percent medium-term target despite higher electricity tariffs, seasonal food prices and firm domestic demand amid 11.7 percent real GDP growth in January-April. The rate has been steady at 9.00 percent since January 2025. Short-term interbank money-market rates continue to move within the central bank’s corridor, the foreign-exchange market is relatively stable with a flexible exchange rate, and abundant banking-system liquidity has supported a 15.6 percent rise in lending over the first four months of the year. External conditions are clouded by global trade policy shifts and geopolitical tensions that are fuelling volatility in commodity and financial markets, posing risks to the open Kyrgyz economy. The central bank reaffirmed its balanced approach and said it stands ready to adjust policy if price-stability risks intensify; the next policy meeting is scheduled for 28 July 2025.
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.