- Decision
- Maintain
- Rate change
- 0 bps
- discount rate
- 9.25%
The Board of the National Bank of the Kyrgyz Republic on 25 August 2025 left the discount (key) rate unchanged at 9.25 percent, judging that elevated annual inflation of 9.4 percent—driven by volatile global food prices, seasonal food-price shifts and the continued pass-through from electricity-tariff revisions—still warrants a tight stance even as economic activity remains strong. Following a 25 bp increase in July that ended a six-month hold at 9.00 percent, the policy rate is now steady. The central bank says its monetary measures aim to preserve the som’s purchasing power and keep money supply at an equilibrium level, with domestic currency and interbank markets described as stable. Cumulative consumer-price growth since January stands at 5.0 percent, while real GDP expanded by 11.5 percent in January–July on robust industry, construction and services, supported by higher household incomes, stronger remittance inflows and rising consumer lending. External conditions remain highly uncertain amid persistent geopolitical tensions and elevated inflation in key trading partners. The central bank pledges a balanced approach and does not rule out further policy adjustments should price-stability risks intensify; the next policy meeting is scheduled for 27 October 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.