The National Bank of Kyrgyzstan decided to maintain the discount rate at 13%, as announced by Aida Karabayeva, the official representative of the bank, at a press conference on January 30. The decision was made after monitoring trends in the economic situation both domestically and globally.
The annual inflation rate in Kyrgyzstan continued to decline, reaching 7.3% at the end of 2023. Economic activity in the country remains robust, with the real GDP growth rate at 6.2% due to significant contributions from the services sector and manufacturing industry.
Domestic demand remains strong, fueled by rising consumer lending rates, increasing wages, and increased remittance inflows. The ongoing monetary policy contributes to strengthening the savings behaviour of the population, Karabayeva added.
Growth in banking sector
Preliminary data for 2023 shows that the deposit base grew by 27.3% to about KGS 431.3bn ($4.8bn). The banking sector continues to actively lend to the real sector, with the volume of the loan portfolio increasing by 26.3% to KGS 257.8bn ($2.9bn) last year.
The National Bank believes that the key performance indicators of financial and credit institutions demonstrate a sufficient margin of safety, allowing the stability of the banking system to be maintained. Commercial banks have sufficient liquidity in the national currency, and the domestic foreign exchange market remains relatively stable.
In 2023, the NBKR held 14 interventions to sell foreign currency for $655.7mn.
Future Outlook
The National Bank will continue to monitor the emerging situation both in the external environment and in the domestic economy. In case of any risks, the financial regulator does not exclude the possibility of making additional adjustments to the monetary policy.
The next scheduled meeting of the NBKR Board on the size of the discount rate will be held on February 26, 2024.
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