Interconnectedness of markets through trade and financial operations determines the impact of volatility in the main partner countries on financial indicators in Kyrgyzstan, the National Bank of the country has reported.
Under the current conditions, the measures of the National Bank are aimed at mitigating the negative impact of external shocks on the economy of Kyrgyzstan. Ensuring price and financial stability are the main objectives of the National Bank.
“The National Bank adheres to the floating exchange rate regime in conducting monetary policy. But activation in the foreign exchange market is caused, to a greater extent, by psychological factors and citizens’ expectations. To smoothen out sharp fluctuations in the exchange rate, the National Bank conducted an intervention on the sale of foreign currency of $53.7 million the day before, including $4 million were sold in cash. The situation in the domestic foreign exchange market is currently stable,” the National Bank of the Kyrgyz Republic stressed.
The volume of international reserves of the National Bank is high and covers about five months of the future volume of imports of goods.
As of March 9, international reserves amounted to $2,428.26 billion.
“The existing sufficient international reserves and a wide range of monetary and regulatory instruments make it possible for the National Bank to respond promptly, including through foreign exchange interventions, to prevent speculative actions. The National Bank constantly monitors the situation in the domestic foreign exchange market and on the external financial markets,” the National Bank said.
Four interventions have been conducted since the beginning of 2020 until March 10, during which $140.2 million have been sold. (24.kg/Business World Magazine)