National Bank of Kyrgyzstan holds policy rate at 12%

BISHKEK. Aug 25 (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 prices in Kyrgyzstan were still affected mainly by external factors: geopolitical tension, including the ongoing conflict in the Middle East and associated price fluctuations in global commodity markets, are influencing the cost of imports.

"Consumer prices in Kyrgyzstan have risen 7.3% since the beginning of 2026. Annual inflation [August 2026 compared with August 2025] is 11.7%. In recent months, one of the most notable conduits for the transmission of external factors has higher fuel and lubricant prices, which is reflected in transportation and production costs within the country, as well as rising food prices due to high price volatility in global food markets. Domestic food prices have risen 6.3% since the beginning of this year, and non-food prices 5.8%. Prices for services, which have increased by 11.1%, are influenced by internal factors," the National Bank said.

Economic activity in Kyrgyzstan remains high - real GDP grew 11.1% in H1 2026. Economic growth is supported by high investment activity, primarily in construction, as well as rising domestic consumption. Increasing household incomes and expanding lending support consumption and create steady domestic demand.

"Monetary conditions minimize the impact of external inflationary risks and support the national currency's purchasing power. The National Bank is actively regulating excess liquidity in the banking system, thereby limiting the monetary contribution to inflation. Previous monetary decisions and tactical measures keep short-term money market rates within the interest rate corridor and near the National Bank's key rate. Persistent external inflationary risks require monetary conditions to remain tight for the time being," the National Bank said.

The regulator said that in these conditions, holding the key rate will help limit secondary inflation effects from external factors and create the preconditions for a sustainable decline in inflation in the medium term. Should any risks to price stability arise, the National Bank does not rule out adjusting its monetary policy.

The regulator's next rate-setting meeting is scheduled for October 26.

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.