National Bank of the Kyrgyz Republic explains higher foreign exchange intervention volumes, says reserves remain sufficient

The National Bank of the Kyrgyz Republic published an explanation of its foreign exchange interventions, emphasizing that they are used to smooth temporary imbalances between demand and supply in the domestic foreign exchange market rather than to manage the som exchange rate. It said the Kyrgyz Republic remains under a floating exchange rate regime, with the som formed on a market basis, and that the recent increase in intervention volumes reflects stronger economic activity, expanding trade and investment, and higher business demand for foreign currency. The bank linked that demand to a sharp increase in the size of the economy and in import-intensive activity. Nominal gross domestic product rose from KGS 782.9 billion in 2021 to KGS 1.98 trillion in 2025, more than 152.5 percent higher, while fixed capital investment increased from KGS 122.8 billion to KGS 374.6 billion over the same period and construction work grew 21.1 percent in 2025. Against that backdrop, the National Bank sold USD 853.0 million in foreign currency in 2025 and USD 1,472.6 million from the start of 2026 to July 16 to cover temporary shortages of supply. It argued that intervention volumes remain moderate relative to reserves, with current net US dollar sales at about 17 percent of total international reserves, compared with 24.4 percent in 2021 and 25.6 percent in 2023. The National Bank said international reserves remain sufficient to respond to changes in foreign exchange market conditions and possible external shocks. It added that it will continue to monitor domestic and external markets and take further measures if needed to support macroeconomic and financial stability.