The Board of the National Bank of the Kyrgyz Republic considered the following issues and adopted respective resolutions at the meeting held of January 29, 2014:  

· “On Regulation “On 7-day loan provided by the National Bank of the Kyrgyz Republic” (№ 2\5); 

· “On introduction of amendments and additions to the Resolution of the National Bank of the Kyrgyz Republic Board “On Regulation on the procedure of deposit operations conducted by the National Bank of the Kyrgyz Republic in the national currency” dated March 28, 2013 №10/11(№ 2\6); 

· “On introduction of amendments and additions to the Resolution of the National Bank of the Kyrgyz Republic Board “On approval of the Regulation on the procedure of placement, re-offering, additional placement, re-purchase and carrying out settlements with the public securities of the Government of the Kyrgyz Republic by means of the National Bank of the Kyrgyz Republic” dated June 26, 2013 № 20\1 (№ 2\7); 

· “On introduction of amendments and additions to the Resolution of the National Bank of the Kyrgyz Republic Board “On approval of the Regulation on issue, placement, circulation and redemption of the notes of the National Bank of the Kyrgyz Republic” dated March 28, 2013 №10/6 (№ 2\8); 

· “On introduction of amendments and additions to the Resolution of the National Bank of the Kyrgyz Republic Board “On approval of the Regulation on the “overnight” loan provided by the National Bank of the Kyrgyz Republic”” dated March 28, 2013 № 10/7 (№ 2\9); 

· “On introduction of amendments and additions to some regulatory and legal acts of the NBKR” (№ 2\15); 

The National Bank of the Kyrgyz Republic summarized the results of the year 2013  

Press-conference on preliminary results of monetary policy for 2013 with the participation of Deputy Chairman, Zair Chokoev and Abdybaly tegin Suerkul, was held in the National Bank of the Kyrgyz Republic on January 28.   

The NBKR Deputy Chairman, Z. Chokoev, submitted information on monetary indicators for 2013 and major indicators of the banking system. “Thus, monetary base increased by 13.4% and amounted to KGS 73.1 billion. Assets of the banking sector in the republic increased by 31%. The loan portfolio of operating commercial banks increased by 15%, deposits – by 19%. Interest rates on loans decreased. Based on the results of the year, inflation value constituted 4%,” he said. “Generally, the year 2013 can be considered successful for the country, which is indicated by GDP growth by 10.5%. This distinguished result is provided by growth in the industrial sector, trade, agriculture and other sectors,” said Z. Chokoev.  

With regard to the amendments introduced by the National Bank into the fundamental principles of the monetary policy, the participants of the press-conference emphasized expected strengthening impact of the interest rates on the real economy. Herewith, the purpose of the monetary policy is the same – achievement and support of price stability.  

Procedure of discount rate determination is changed. Currently, discount rate depends on the NBKR notes yield. Approximately, since March of the current year the discount rate will be regularly determined by the NBKR Board. The decision will be made based on assessment of the economic situation, trends and forecasts. Discount rate, as a key interest rate of the National Bank, will be an indicator for the market about the trend of the monetary policy. The purpose of introduced amendments is to intensify impact of interest rate transmission channel operation of the NBKR monetary policy on market rates and decrease of interest rates on loans.       

The issue on introduction of new instruments, both on liquidity injecting and withdrawal, has already been publicly discussed. “Overnight” deposits and 7-day loans will be introduced. In other words, commercial banks can regularly receive funds from the National Bank for refinancing of their operations. In fact, these loans will be a long-term instrument with floating interest rate for the banking system due to constant access to resources.  

In 2013, the National Bank introduced a new instrument of monetary policy on liquidity support in the banking system. In order to increase the volume of lending to the real sector of economy and decrease the interest rates, the NBKR started to conduct credit auctions for refinancing purposes. The amount of KGS 970.9 million was placed within the framework of credit auctions in the last year, the average weighted interest rate constituted 5.70 percent.   

Upon announcing the major results of the National Bank operation in 2013, the participants of the press-conference answered the questions of journalists. Thus, in covering the issue of increasing the U.S. dollar exchange rate in the country, Z. Chokoev emphasized that the current situation in the foreign exchange market – strengthening of the U.S. dollar exchange rate – is a world trend, which affected all countries. “Ruble weakening is observed nowadays. The Central Bank of the Russian Federation declared that it will not retain the ruble exchange rate, this position is right. Under such circumstances, it is necessary to remember the situation with Belarus, when the political decision of retaining exchange rate by any means was taken. As a result, the country has lost half of its international reserves; the level of inflation was 180%. It should be remembered, as well-being of the people is conditioned by desire to support exchange rate,” he summarized.  

Abdybaly tegin S. with regard to this issue added that external factor in decline of the Kyrgyz som exchange rate has become more significant. “The monetary policy of the USA was changed. The volumes of securities purchase decreased in the market, which resulted in increase of the demand for the U.S. dollar,” he explained.  

The issues of financial and foreign exchange market, external debt, remittances of migrant workers, results of the Kyrgyz Republic joining the Customs Union, international reserves and the NBKR notes were covered in the course of the press-conference.  

In answering the questions of journalists on the volume of international reserves and the NBKR notes, Abdybaly tegin S. noted that gross international reserves increased by 8.3% within a year and amounted to USD 2 billion 238 million. “The National Bank issued notes to the amount of KGS 44 billion in the last year. By the end of the year, the balance amounted to KGS 6.6 billion,” summarized the NBKR Chairman.   

Licenses/certificates have been issued to the following non-bank financial institutions and exchange offices:  

· LLC Lombard “Euro Capital” (license №5121 dated January 31, 2014 for conducting exchange operations with foreign currency in cash) Legal address: 125, Abdrakhmanov str., Bishkek.  

Certificates/licenses of the following non-bank financial institutions have been cancelled /revoked: 

· Certificate of accounting registration of LLC MCC “Tolubai” № 272 dated February 11, 2010 for micro-crediting of individuals and legal entities has been cancelled since January 27, 2014. Self-liquidation according to the decision of the founder №7 dated January 24, 2014. Legal address: 76/2, Sovetskaya str., Cholpon-Ata town, Issyk-Kul district, Issyk-Kul region.  

· Certificate of accounting registration of LLC MCC “DZHUR-AS” № 337 dated January 28, 2011 for micro-crediting of individuals and legal entities has been cancelled since January 28, 2014. Self-liquidation according to the decision of the founder dated December 20, 2013. Legal address: 32-17, Ibraimov str., Bishkek (Actual address: office 208, 2-nd floor, Children’s Complex, 12 microdistrict, Bishkek city). 

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