- Decision
- Maintain
- Rate change
- 0 bps
- Discount rate
- 11%
The Board of the National Bank of the Kyrgyz Republic kept the key rate at 11.00 %, effective 27 January 2026, citing still-elevated 9.4 % year-on-year inflation and robust 11.1 % real GDP growth in 2025, both underpinned by strong domestic demand and investment, while external price pressures remain volatile. The decision follows a cumulative 200 bp of tightening between July and November 2025 that lifted the rate to its current level. Monetary conditions remain “moderately tight”; the central bank is actively draining excess liquidity in a highly liquid banking system, keeping the BIR interbank benchmark near the lower bound of its interest-rate corridor. Inflation is forming within projections but above the 5-7 % target, with non-food and services prices pushed up by second-round effects, tariff revisions and firm domestic demand. GDP expansion is driven mainly by construction and services, supported by higher budget financing, rising household incomes, remittance inflows and consumer lending. The domestic foreign-exchange market is stable. Persistently volatile global food and commodity prices and heightened geopolitical uncertainty in key trading partners continue to fuel imported inflation risks. The central bank will maintain a balanced approach and stands ready to adjust policy if threats to price stability emerge.
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.