National Bank of Kyrgyzstan holds policy rate at 12%
BISHKEK. May 26 (Interfax) - The National Bank of Kyrgyzstan has decided to hold its key policy rate at 12% per annum, the regulator said on its website.
It said that since the beginning of 2026, the external economic environment had been marked by a strengthening of geopolitical factors related to the situation in the Middle East, leading to high volatility and price rises in global energy and food markets, and external inflationary processes had intensified against this backdrop.
Since Kyrgyzstan is a small, open economy with a high share of imports in the consumer basket, domestic food prices have also begun to adjust in line with global prices. Inflation in the country since the beginning of this year was 4.7% as of May 15, the annual figure being 10.9%.
"The biggest contributor to inflation is rising prices for food products and services. Current inflation factors in Kyrgyzstan are becoming non-monetary in nature, against the backdrop of external drivers and the ongoing influence of domestic factors like the planned increase in electricity and housing tariffs, rising prices for hotel and restaurant services due to ongoing fiscalization, and strong domestic demand. Pro-inflationary factors like increased money supply through both fiscal and monetary channels are generally mitigated by monetary policy instruments and the continued stability of the domestic currency market," the regulator said.
Kyrgyzstan's economy sustains high growth rates amid robust consumer and investment demand. Real GDP rose 2% in January-April 2026, driven by growth in the services and industrial sectors, as well construction due to higher capital investment and infrastructure projects. Domestic demand is supported by rising real incomes. Monetary conditions remain tight and are aimed at minimizing the impact of external inflationary factors and limiting the secondary effects of domestic factors, with the aim of putting the conditions in place for inflation to return to the 5%-7% target in the medium term.
The domestic money and currency markets remain stable and the relatively exchange rate stability help to moderate business and household inflation expectations. The banking sector maintains a high level of surplus liquidity, which is sterilized using the National Bank's instruments to limit the monetary component of inflation
"The inflation outlook in Kyrgyzstan remains sensitive to external conditions. The main external risks are related to ongoing geopolitical tensions, price volatility in global food markets and potential global supply chain disruption. Internal inflation factors are more predictable and are primarily linked to domestic demand and tariff policy. Taken together, these conditions are determining future inflation dynamics with the balance of risks tilted toward pro-inflationary external factors," the National Bank said.
In these conditions, the National Bank continues to closely monitor and assess inflation factors, and the key rate has currently been held at 12%. Maintaining tight monetary conditions will create sustainable conditions for inflation to slow to 5%-7% in the medium term. Should any risks to price stability arise, the National Bank will respond promptly to pro-inflationary factors that arise.
The regulator's next rate-setting meeting is scheduled for July 27.
The key policy rate had been 9% per annum since May 2024, when it was lowered from 11% per annum. The rate was hiked to 9.25% in July 2025 amid inflationary external factors and price volatility in global food and commodity markets, then to 10% in October and to 11% in November 2025 and to 12% in February 2026.
