ь On June 8, 2011 at the meeting of the Board of the National Bank of the Kyrgyz Republic the press release on the Monetary Policy Report of National Bank for the 1st quarter of 2011 was approved:  

The report noted that in conditions of high inflation in the country, the National Bank of the Kyrgyz Republic continued to accept measures to tighten the monetary policy. In order to limit the inflation monetary component in the first quarter of this year, the National Bank of the Kyrgyz Republic increased its operations to avoid excess liquidity in the banking system: the volume of NBKR notes increased in 1.7 times up to 1 165.2 million soms, and the volume of REPO-transitions in 3.3 times to 230.8 million soms. The discount rate increased from 5.5 percent at the beginning of the year to 6.9 percent as of the end of the 1st quarter.  

Moreover, within the framework of the monetary policy tightening, the National Bank of the Kyrgyz Republic increased the obligatory reserves size for commercial banks from 8 to 9 percent from the estimate base from March 14, 2011 and increased the base rate for crediting purposes of the LLC Specialized Fund for Banks Refinancing from 7 to 8.25 percent. 

In order to prevent accute fluctuations of the exchange rate, the National Bank of the Kyrgyz Republic in January-March 2011 conducted foreign exchange intervention: the net sale of foreign currency amounted to 62.5 million USD; the USD exchange rate against KGS increased by 0.3 percent from 47.0992 KGS/USD to 47.2448 KGS/USD.  

During the first quarter of 2011, the monetary base fell by 7.2 percent to make 45.1 billion soms. Broad money M2X decreased during the reporting period by 3.7 percent to make 66.6 billion soms. The indicator of the economy monetization increased by 0.5 percentage points and constituted 28.4 percent. 

In the first quarter of 2011, there was a turn of the economy towards economic development: the recession was replaced by the growth which totaled to 0.4 percent.  

Balance of payments was formed positive at the amount of $ 27 million. At that there was noted worsening of the current account: the deficit increased to 4.3 percent to GDP. However, there was a significant increase in money transfers of labor migrants. 

According to preliminary date of the Central Treasury of the Ministry of Finance, the government budget surplus in January-March 2011 amounted to 1.5 billion soms or 3.2 percent to GDP. The report expressed some concerns about the fact that the main share of government expenditures would be made in the second half, and that the 3-year budget did not include the budgetary consolidation. 

The report noted that the consumer price index in the first quarter of 2011 constituted 6.4 percent, which was primarily associated with high growth in prices for food products such as fruits and vegetables, bakery products, cereals and sugar, against increase in prices on the world commodity markets. 

In the course of discussion it was noted that under current conditions the National Bank of the Kyrgyz Republic jointly with the Government had to take all necessary measures to stabilize the price situation. Moreover, an important condition consists in the uniform distribution of expenditures by the Government in 2011 and coordination of fiscal and monetary policies. 

The meeting discussed prospects of further cooperation with the International Monetary Fund. According to preliminary reports, on June 20, 2011, the Executive Board of Directors of the International Monetary Fund will consider the draft Memorandum of Economic and Financial Policy of the Kyrgyz Republic for the period of 2011-2014. That can be supported by mid-term arrangement with the International Monetary Fund under the Extended Credit Facility (ESF). 

During discussion of the situation on the domestic market, it was noted that in April-May 2011 it has been changed to opposite direction: the supply of foreign currency started to exceed the demand, and there was the trend of the national currency strengthening. The primary analysis showed that one of the factors for such growth included increase in supply of foreign currency remittances from labor migrants. Distinct signs of speculation on the market were not observed. Macroeconomic analysis of the exchange rate dynamics may be performed upon receipt of the balance of payments. In order to prevent acute strengthening of the KGS rate, the National Bank of the Kyrgyz Republic mainly bought the foreign currency in April and May. In this regard it was noted that in the conditions of the budget expenditures increase, it was necessary to carry out interventions, which required further prevention by activation of the open market transactions in order to retain growth rates of the money supply and thus the overall price level increase.  

As a result of the discussion, the Board members approved the monetary policy report for the first quarter of 2011. 

News of non-banking financial institutions  

The National Bank of the Kyrgyz Republic issued licenses/certificates to the following non-banking financial institutions and exchange offices: 

1. PE Mutalipov Dilshat Raimjonovich (License No. 4694, dated June 9, 2011 for conducting cash foreign exchange transactions). Registration numbers of exchange offices: 2781, 2782. Legal addresses: 182, Abdrahmanov Street, Bishkek (Jewelry Center “Rubin”) and 98, Chui Avenue, Bishkek correspondingly;  

2. PE Sarbashev Erkenbai Mamanovich (License No. 4693, dated June 9, 2011 for conducting cash foreign exchange transactions). Registration number of exchange office: 2780. Legal address: 132-2, Ahunbaeva Street, Bishkek; 

3. PE Nesterov Sergei Alekseevich (License No. 4692, dated June 6, 2011 for conducting cash foreign exchange transactions). Registration numbers of exchange offices: 2779, 2778. Legal addresses: Kievskaya Street, Bishkek (Besh-Sary) and Kievskaya/Kulieva Street, Bishkek (exchange office “U Sergeya”) correspondingly;  

4. PE Aidaraliev Chyngyzbek Akylbekovich (License No. 4691, dated June 6, 2011 for conducting cash foreign exchange transactions). Registration number of exchange office: 2777. Legal address: 186, Jibek-Jolu Street, Bishkek; 

5. PE Vasilchenko Viktor Ivanovich (License No. 4690, dated June 6, 2011 for conducting cash foreign exchange transactions). Registration number of exchange office: 2776. Legal address: 166, Jibek-Jolu Street, Bishkek; 

6. PE Mamontov Aleksandr Anatolyevich (License No. 4689, dated June 6, 2011 for conducting cash foreign exchange transactions). Registration number of exchange office: 2775. Legal address: 147, Chui Avenue, Bishkek; 

7. PE Nesterova Vera Aleksandrovna (License No. 4688, dated June 6, 2011 for conducting cash foreign exchange transactions). Registration number of exchange office: 2774. Legal address: 104a, Bokonbaeva Street, Bishkek; 

8. LLC MCC “Alliance Capital” (Certificate on accounting registration No. 371, June 6, 2011 for micro-crediting of physical and legal entities). Legal address: 53, Torgoeva Street, Karakol city, Issyk-Kul oblast (second floor); 

9. LLC MCC “Bai Bol Jumgal” (Certificate on accounting registration No. 372, June 8, 2011 for micro-crediting of physical and legal entities). Legal address: E.Matyeva Street, Chaek village, Jumgal rayon, Naryn oblast (close to the building of the Jumgal rayon administration); 

10. LLC MCC “Kireshe-Tolsun” (Certificate on accounting registration No. 373, June 10, 2011 for micro-crediting of physical and legal entities). Legal address: Manasa Street, Talas city, Talas oblast (central market); 

11. LLC MCC “Akchaiym” (Certificate on accounting registration No. 374, June 10, 2011 for micro-crediting of physical and legal entities). Legal address: 57, Torgoeva Street, Karakol city, Issyk-Kul oblast; 

12. PF MCA “Ton Finance” (Certificate on accounting registration No. 198, June 10, 2011 for micro-crediting of physical and legal entities). Legal address: 64, Atakana Street, Bokonbaevo village, Ton rayon, Issyk-Kul oblast; 

Interbank payments 

Indices of “Elcart” system*