- Decision
- Raise
- Rate change
- 100 bps
- discount rate
- 11%
The Board of the National Bank of the Kyrgyz Republic raised the key rate by 100 bp to 11.00 percent with effect from 25 November 2025, citing persistent external price pressures—especially higher global food and regional energy costs—pushing year-on-year inflation up to 8.9 percent, above the 5-7 percent medium-term target, amid still-robust domestic demand and double-digit GDP growth. After keeping the rate at 9.00 percent through May, the central bank lifted it to 9.25 percent in July, 10.00 percent in October and now to 11.00 percent. The interbank benchmark rate remains near the lower bound of the policy corridor, reflecting a sizeable liquidity surplus. Economic activity stayed strong, with real GDP expanding 10 percent in January–October and bank loan portfolios and deposits each rising about 35 percent, while dollarisation continued to decline. The foreign-exchange market is described as stable and higher international reserves are adding resilience. Ongoing volatility in global food and energy prices and elevated inflation in key trading partners underpin the pro-inflationary environment. The central bank will maintain a balanced approach and stands ready to adjust policy if price-stability risks intensify; the next rate-setting meeting is scheduled for 26 January 2026.
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.