By CentralBankNews.info
Kyrgyzstan’s central bank kept its benchmark discount rate at 5.0 percent to help stimulate the economy and said it would maintain the current monetary policy direction in the forthcoming period in the absence of any external and internal shocks to inflation.
The National Bank of the Kyrgyz Republic (NBKR) has maintained its rate since December 2016 when it last lowered it as part of a 500-basis-point easing cycle that began in March that year.
The NBKR said inflation remained moderate, positive economic growth was continuing and the domestic foreign exchange market in general was stable so the current monetary conditions creates the prerequisites for measures that can support the real sector of the economy.
Kazakhstan’s inflation rate rose to 7.7 percent in October from 7.1 percent in September, above the central bank’s target of 5-7 percent but as expected by the central bank.
While the Kyrgystani som has been relatively stable since mid-2016, after falling sharply in 2014 and 2015 due to Russia’s economic crises, the central bank said there was an excess of demand for foreign currency at the end of October that led to some volatility.
The central bank said it therefore intervened in the foreign exchange market and sold foreign currency to smooth out sharp fluctuations,
Between Oct. 25 and Nov. 14 the som lost 1.7 percent but since then it has been steady and was trading at 69.7 to the U.S. dollar today, little changed from 69.2 at the start of the year.
The economy of Kyrgyzstan expanded by 4.3 percent in the nine months to September and by 3.9 percent in the 10 months to end-October. Excluding output from the Kumtor gold mine, the economy grew by 3.5 percent, helped by a 25.6 percent increase in net inflow of remittances, the central bank said.
Earlier this month the International Monetary Fund forecast that Kyrgyzstan’s economy would expand 3.5 percent this year compared with an estimated 3.8 percent last year.
