- Decision
- Maintain
- Rate change
- 0 bps
- discount rate
- 12%
The National Bank of the Kyrgyz Republic held its key rate at 12%, effective October 27, 2026, citing persistent external inflation pressures despite easing price growth. The rate had risen to 10% in October 2025 and 11% in November, followed by a 100-basis-point increase in February 2026. The central bank maintained tight monetary conditions and actively managed money supply, with short-term money-market rates trading within its interest-rate corridor near the policy rate. Annual inflation eased to 10.8% as of October 16 but remained above the medium-term target of 5–7%, while real gross domestic product grew 10.8% in the first nine months of 2026, supported by construction investment and rising household consumption. The domestic foreign exchange market remained stable. Geopolitical tensions, including the Middle East conflict, continued to drive volatility in global energy and food prices and constrain international goods shipments. The central bank said it would continue assessing domestic and external inflation factors and could adjust monetary policy if risks to price stability emerged.
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, including 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.
Annual inflation rose from 11.3% as of July 17 to 11.7% as of August 14, with the Bank citing higher food and fuel prices, their effects on transport and production costs, and domestic pressures on service prices.
On October 26, the Bank again held the policy rate at 12.00%, effective October 27, as annual inflation eased to 10.8% as of October 16 from 12.2% in September, with prices up 8.5% since the start of 2026. It attributed slower inflation to restrictive monetary conditions and government measures to ensure domestic supplies of socially important goods, but maintained its stance to contain external pressures from the Middle East conflict, volatile food and energy markets and supply constraints, and bring inflation to the 5-7% target over the medium term.