ASTANA — The National Bank of the Kyrgyz Republic raised its policy rate by 100 basis points to 12% on Feb. 23. The decision took effect on Feb. 24.
Photo credit: kyrgyzbank
The bank cited an uneven external economic environment and elevated inflation in major trading partners, noting that domestic prices remain sensitive due to the country’s reliance on imports. Inflation in the Kyrgyz Republic reached 1.8% year-to-date (9.6% annualized) as of Feb. 13, with food prices stabilizing while services and non-food sectors remain elevated due to external and domestic demand factors.
Despite inflationary pressures, the economy continues to grow rapidly. Real GDP rose 9% in January, driven by services, construction, and strong investment in infrastructure. Rising real incomes and expanding consumer lending are also supporting domestic demand, contributing to additional inflationary pressures, reported the bank’s press service.
The National Bank said tightening monetary conditions is necessary to slow inflation and ensure medium-term price stability within the target range of 5-7%. Authorities will continue monitoring risks and may adjust policy if required. The next key rate meeting is scheduled for April 27.
