- Decision
- Maintain
- Rate change
- 0 bps
- discount rate
- 12%
The National Bank of the Kyrgyz Republic held its key rate at 12.00%, effective August 25, 2026, citing persistent external inflation risks and strong domestic economic activity. Over the past year, the central bank raised the rate by a cumulative 275 basis points from 9.25% in August 2025 to 12.00% in February 2026 and has held it since. The central bank will continue actively managing excess banking-system liquidity, while short-term money-market rates, including the interbank benchmark interest rate, remain within the interest-rate corridor and close to the policy rate. Annual inflation reached 11.7% as of August 14, while real gross domestic product grew 11.1% in January-July, driven mainly by construction investment and domestic consumption, with rising incomes and credit supporting demand. Geopolitical tensions, including conflict in the Middle East, and volatility in global commodity and food prices continue to raise import, fuel, transport and production costs. The National Bank said maintaining tight monetary conditions should limit second-round effects and support a sustained medium-term decline in inflation, while signalling it may adjust policy if price-stability risks 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.