National Bank reduces its policy rate by 50 basis points to 5.00%.
The National Bank of the Kyrgyz Republic reduced
its policy rate to 5.50 percent
On November 28, 2016, the Board of the National Bank of the Kyrgyz Republic decided to reduce the policy rate by 50 basis points to 5.50 percent. The decision becomes effective as of November 29, 2016.
Overall price level continues to decrease. Deflation in annual terms (as of November 18) reached 0.7 percent. The consumer price dynamics is mainly determined by the drop in food prices, additionally in recent months the growth rate of prices for goods included in non-food group has been also slowing down.
In the third quarter of 2016, the key economic activity indicator shifted to positive phase: in January-October 2016, the real GDP increased by 2.7 percent. Excluding the data of the “Kumtor” gold-mining enterprises, real GDP growth, which is more relevant for monetary policy purposes, reached 3.3 percent. Domestic consumption has slightly recovered. According to the estimates of the National Bank, these factors will have a moderate impact on inflation in the upcoming period.
At the domestic foreign exchange market, the situation is stable. Since the beginning of the year (as of November 28) the national currency appreciated by 9.0 percent. Foreign exchange interventions are conducted only to smooth short-term exchange rate fluctuations.
Easing monetary policy conditions on interest rate started from March 2016 allowed to support the measures aimed at promoting the real sector to return to its positive trend. The inflationary risks remained low. Results of the monetary policy are reflected in the current reduction of money market rates in the national currency.
According to the forecasts of the National Bank, inflation will be close to zero by the end of 2016 and in the next few months a low inflationary environment remains. Based on current forecasts of price dynamics, the Board of the National Bank deems appropriate to decrease the policy rate. National Bank intends to continue expansionary monetary policy in the upcoming period in the absence of external shocks.
Thus, due to continuing the current monetary policy, deflationary factors will be mainly neutralized in the upcoming months. In the medium term, inflation will return to its target range of 5-7 percent.
National Bank regularly assesses external and internal factors influencing inflation and will continue to take relevant and timely monetary policy measures.
The next meeting of the Board of the National Bank of the Kyrgyz Republic on the monetary policy rate is scheduled for December 26, 2016.
On December 4, 2016 the site of the National bank of the Kyrgyz Republic www.nbkr.kg will not work from 9:00 to 14:00 (GMT + 6) due to planned maintenance work. We apologize for any inconvenience.
On October 16, 2016 the site of the National bank of the Kyrgyz Republic www.nbkr.kg will not work from 8:30 to 22:00 (GMT + 6) due to planned maintenance work. We apologize for any inconvenience.
The National Bank of the Kyrgyz Republic keeps
its policy rate unchanged at 6 percent
On September 26, 2016, the Board of the National Bank of the Kyrgyz Republic decided to keep the monetary policy rate unchanged at 6.00 percent. The decision becomes effective as of September 27, 2016.
In the current period in the Kyrgyz Republic deflationary processes are recorded. Overall price level in annual terms has decreased by 0.4 percent (as of September 16). This decrease was due to previously taken monetary policy decisions and supply factors of food production at the foreign markets (favorable situation in the grain markets of Kazakhstan and Russia and the world's major food markets) as well as at the domestic markets (growth of production in agriculture). Decrease in domestic consumption still constraints consumer prices in the country.
Economic activity in the country shows recovery. In January-August 2016, real GDP increased by 0.4 percent, compared to decrease by 1.2 percent in January-July 2016. Significant drop in the manufacturing industry, mainly due to decline in production of the “Kumtor” gold-mining enterprises, and weak demand for domestic products still restrain economic growth. Excluding “Kumtor”, the economy grew by 2.1 percent. For the monetary policy formulation and analysis, the indicator of real GDP growth without “Kumtor” is more relevant.
The exchange rate policy of the National Bank aimed at smoothing sharp exchange rate fluctuations. Since the beginning of the year (as of September 23) the Kyrgyz Som appreciated by 9.4 percent. At the domestic foreign exchange market the situation is stable.
According to the forecasts of the National Bank, in the next few months a low inflationary environment remains. Under a low inflationary risks environment and in order to retain economic recovery, maintaining the current policy rate unchanged will allow neutralizing deflation. Thus, annual inflation rate will return to the target in the forecasting horizon.
National Bank continues to assess external and internal factors influencing inflation and conducts relevant monetary policy aimed at keeping inflation rate within the 5-7 percent band in the medium term, as determined in the Main monetary policy guidelines.
The next meeting of the Board of the National Bank of the Kyrgyz Republic on the monetary policy rate is scheduled for November 28, 2016.
The Economic Research Center has conducted the study "Gender Aspects of the Households' Saving Behavior in the Kyrgyz Republic"
Based on the data analysis of 2,400 households received within the framework of the study "Life in Kyrgyzstan" for 2013, the author has come to conclusion that the level of income and accumulated wealth, availability of a credit, as well as the shocks faced by a household largely determine whether it will save or not. The marital status of the household head and the place where the family lives have also a significant influence on the probability of savings. Besides, the households with equal economic, social and geographic characteristics differ in the saving behavior depending on the gender identity of the household head.
The households located in the urban area and in the north oblasts of the republic are inclined to save even less than the households do located in the villages and in the south of the country. However, at present, the largest part of the savings in the households located in the country is channeled to purchase of small and great cattle, grain, seedlings and seeds, rather than to save finances; the large amounts are saved in a such asset as lands. Accordingly, the rural population has a significant saving and investment capacity that is increased with the growth of income and that can be directed to the formal financial markets.
The received results show that in the households with a female head the probability of the savings is higher than in the households where the head is a man. Thus, the financial institutes are recommended to develop deposit products oriented to the female household heads that take into account cultural and financial peculiarities of these families.
The households managed by men are more sensitive to the external shocks. Taking into account the fact that the majority of the households are managed by men, there is a sense to develop and to make popular the insurance system against shocks (loss of harvest, death or disease of a bread earner, natural disaster, etc.).
The study results can be found here:
As part of the World Nomad Games, the National Bank of the Kyrgyz Republic arranged the exhibition-sale of numismatic products in Cholpon-Ata
The exposition features memorable silver and gold coins issued by the National Bank during the latest 20 years. Among the displayed exhibits there is the most sought-after coin of the recent time named “World Nomad Games”, the latest silver coin issued by the National Bank “25th year anniversary of independence of the Kyrgyz Republic”, the most eminent silver coin “Silk Road” which won the “Coin of the Year” Competition in Berlin, as well as coins of the popular series, such as “Age of the Kyrgyz Kaganat ”, “National sport and folk games”, “Kyrgyzstan on the Great Silk Road”, “Red Book of Kyrgyzstan”, “Chinghiz Aitmatov’s Works”, etc.
Collectible coins of Kyrgyzstan are not only souvenir products or items for collection, they also serve as an important source of information. The National Bank of the Kyrgyz Republic issues collectible coins to commemorate historical events related to formation of the Kyrgyz statehood, creation of cultural monuments, celebration of anniversaries, achievements in culture and sports, regeneration of national customs and games, popularization of endangered species of fauna and flora of Kyrgyzstan. The themes of collectible coins issued by the National Bank characterize the beauty, identity of Kyrgyzstan, and its uniqueness.
The National Bank of the Kyrgyz Republic issues collectible coins using modern technologies of coin production: gilding, hologram, tampon printing, oxidation, inlaying precious stones (diamonds, Swarovski crystals). The professional artists-designers are attracted to prepare the sketches of collectible coins of the national currency.
During the period from 1995 to 2016 the National Bank issued 59 collectible coins making 12 series: 43 silver coins (“Great Kyrgyz Kaganate”, “Barsbek - Kyrgyz people kagan”, “Kumbez of Manas”, “Tunduk Kotoruu”, “Sovereign Kyrgyzstan”, “Tamga - the symbol of the unity of the Kyrgyz Kaganat”, etc.), 4 gold coins (“Manas”, “Osh-3000”, “Kurmanjan Datka”, “Snow Leopard”), 2 German silver coins (“Komuz”, “Kyz Kuumai”), 10 copper-nickel coins (“Tash Rabat”, “Uzgen Architectural Complex”, “Sulaiman Too”, “Burana”, “Issyk-Kul Lake”, etc.)
Collectible coins of Kyrgyzstan have won a number of awards in the prestigious international coin competitions. For example, a series of coins named “Chinghiz Aitmatov’s Works” was awarded with an honorable diploma of “BIBLIO-GLOBUS” Trading House as part of the fourth international competition of memorable coins “Monetary Constellation - 2010” held in Saint Petersburg, and a collectible coin from the “Silk Road” series was the winner of the “Coin of the Year” Competition held in 2013 by “Krause Publications” Publishing House in Berlin in the “Most Historically Significant Coin” nomination. The collectible silver coin “Saimaluu-Tash” took the third prize in the international competition “Monetary Constellation 2014” held in Moscow in the “Silver Coin of the Year” nomination.
As the National Bank reports one should provide appropriate conditions for storage of collectible coins. Otherwise being subject to the damaging exposure of the environment – air, moisture, overheating, the coins can lose their numismatic value. To avoid damage of a coin it should be stored in an acryl capsule which allows the coin to preserve its original state. The coins can be taken and held by their side surface only (edge). A coin with even minimal damages (insignificant scratches, fingerprints, etc.) loses its numismatic value. Therefore, it is strongly recommended to avoid opening the acryl capsule and taking the coin out.