The Board of the National Bank of Kyrgyzstan kept the discount rate (key rate) at 5%, website of the National Bank of the Kyrgyz Republic reported.
The economy of Kyrgyzstan remains exposed to changes in the global and regional economies as the COVID-19 pandemic continues. Despite some signs of economic recovery in individual countries after quarantine has been lifted, overall dynamics of real GDP in many countries remains in the negative zone. International financial organizations are revising the forecasts of the global and regional economies in the direction of deterioration.
“Recession in the global economy in 2020 is expected to be significant. Low economic activity in Kyrgyzstan has impact on the dynamics of GDP indicators, showing a decline in production in almost all sectors of the economy. Reduction in remittances to the country and the volume of export revenue acts as a deterrent to domestic consumption,” the National Bank stressed.
There is a stability in the monetary environment. Short-term money market rates fluctuate within the interest rate range set by the National Bank, demonstrating an approach to the key rate.
The gradual growth of the loan portfolio and deposit base of commercial banks is maintained.
“Assumptions about the deterrent effect of weakening domestic and foreign demand on inflation in the country remain. Taking into account the preconditions for the development of the external environment and the emerging domestic economic conditions, the National Bank decided to keep the discount rate at 5%, taking into account the need to maintain measures to stimulate the real sector of the economy,” the National Bank of the Kyrgyz Republic says.
The next meeting of the Board of the National Bank on the size of the discount rate will be held on August 24. (24.kg/Business World Magazine)