- Decision
- Maintain
- Rate change
- 0 bps
- discount rate
- 12%
The Board of the National Bank of the Kyrgyz Republic kept the discount (key) rate unchanged at 12.00 percent, effective 28 April 2026, concluding that a continued restrictive stance is required as surging global food and energy prices amid heightened Middle-East tensions and still-elevated inflation in key trading partners remain the main drivers of domestic price pressures. Following cumulative tightening of 275 bp between July 2025 and February 2026, the central bank aims to steer inflation back to its 5–7 percent medium-term target; consumer price inflation reached 11.3 percent year-on-year (3.9 percent year-to-date) on 17 April, with services prices up 17.2 percent. Economic activity stays strong—real GDP expanded by 10.1 percent in January-March, propelled by services, industry and construction, underpinned by rising wages and remittances. The som’s exchange rate remains broadly stable, helping contain inflation expectations despite volatile external conditions. The NBKR pledged to monitor internal and external risks closely and stands ready to adjust policy if necessary, with the next rate decision set for 25 May 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.