- Decision
- Raise
- Rate change
- 75 bps
- discount rate
- 10%
The Board of the National Bank of the Kyrgyz Republic (NBKR) raised the discount (key) rate by 75 bp to 10.00 percent, effective 28 October 2025, aiming to curb rising inflation fuelled by higher service-sector costs, constrained global energy supply and still-strong domestic demand. After keeping the rate at 9.00 percent through May and lifting it by 25 bp to 9.25 percent in July—where it stayed in August—this move marks the largest tightening of the year. The NBKR says money-market rates continue to balance savings incentives and credit availability, the foreign-exchange market remains stable, and the banking sector is highly liquid in som terms, supporting ongoing credit growth. Consumer prices have increased 6.2 percent year-to-date and 8.4 percent year on year as of 17 October, while real GDP expanded 10 percent in the first nine months on robust consumer and investment activity underpinned by higher household incomes and remittance inflows. Elevated geopolitical risks and volatile global energy and food prices are seen as the main external sources of inflationary uncertainty. The central bank will maintain a balanced approach and stands ready to adjust policy if price-stability risks emerge; the next policy meeting is set for 24 November 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.