By CentralBankNews.info
Kyrgyzstan’s central bank kept its benchmark discount rate at 5.0 percent, saying the current rate should help stimulate the economy while inflation is expected to remain within the target range of 5.0 to 7.0 percent.
The National Bank of the Kyrgyz Republic (NBKR) has kept its rate steady since December 2016 when it last cut it as part of a 500-basis-point easing cycle that began in March 2016.
Kyrgyzstan’s inflation rate eased to 3.6 percent in July from 4.1 percent in June, in line with the central bank’s forecast, and will trend toward the lower boundary of the inflation target, the NBKR said.
It added improving domestic growth and external demand were the main factors affecting prices.
The country’s economy continues to develop positively, with Gross Domestic Product in the first 7 months of the year up by an annual 6.9 percent, the bank said. Excluding output from the Kumtor gold mine, GDP rose 3.6 percent.
In order to maintain positive growth, the central bank pointed to its main trading partners along with higher remittances from abroad. Net inflow of money transfers in the January-July period rose by 28.8 percent, it added.
The foreign exchange market also remains stable, with the exchange rate of the som up by 0.9 percent from the start of this year to Aug. 25, the central bank said, adding it had not participated in the foreign exchange market this month.
The Kyrgyzstani som, which fell sharply in 2014 and 2014, has been relatively stable since May 2016 and was trading at 68.5 to the U.S. dollar today, up 1 percent this year.
In April the International Monetary Fund forecast 2017 growth of 3.5 percent growth as external and internal demand continue to improve.
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