On May 28, 2014 press conference was held which highlighted the results of the meeting of the Board of the National Bank of the Kyrgyz Republic on monetary and credit policy 

Mr. Seyilbek Urustemov, Head of the Economic Department of the National Bank, Ms. Raushan Seytkasymova, Head of Monetary Operations Department and Ms. Nasiba Imaralieva, Head of Monetary Policy Department of the National Bank attended the press conference. 

Speakers announced the results of the meeting of the Board of the National Bank on the issues of monetary policy, including the Report on monetary policy for the 1st quarter, macroeconomic forecasts and the size of the discount rate. Besides, they answered questions of the journalists on the situation in the currency market, reducing the level of dollarization of the economy, the transition to multi-currency payments, etc. 

Press-release on the results of the meeting of the Board of the National Bank of the Kyrgyz Republic on the discount rate 

On May 26, 2014 a meeting of the Board of the National Bank of the Kyrgyz Republic was held. The Report on monetary policy for the 1st quarter, the macroeconomic forecasts and the size of the discount rate were considered. 

The Report highlighted that the National Bank started to implement a new operational framework of monetary policy in the 1st quarter of 2014, in which an intermediate benchmark interest rates stand. For these purposes the mechanism of determination of the discount rate was changed, new tools of monetary policy were introduced and existing tools modified. The purpose of the transition is to strengthen the percentage transmission channel of monetary policy and the approximation of money market rates to the level of the discount rate of the National Bank. 

Changes in the basis of monetary policy provided the impetus for the development of the interbank market: both volume and number of transactions grew more than seven times. Interbank rates were established within the “corridor” (where the “ceiling” loan rate acts the credit rate of “overnight”, that is 9.0 percent, and the “floor” is the rate on deposit “overnight”, equal to 1.5 per cent), their average value was about 8.0 percent. The average level of excess liquidity in the banking system in January-March 2014 decreased by 37.4 percent compared to the indicator in 2013. 

Decline in external demand due to the slowing economies of major trading partners was reflected in the reduction of the current account deficit to 13.4 percent of GDP (preliminary data). Trade deficit decreased by 1.6 percent. Net inflow of current transfers in dollar terms decreased by 8.5 percent, but the markup remained in the nominal of exchanges. 

Growth of the economy in the first quarter of 2014 was 5.6 percent. One of the factors of growth in January-March was the delayed effect in the construction sector. GDP deflator was at the level of 2.5 percent. 

In the first quarter the state budget was executed with a surplus of 2.0 billion soms or 2.9 percent to GDP. In connection with the retention of high import dependence of the economy, attention was drawn to the need of conducing continuous monitoring of prices on world food markets and the study of their possible changes in the medium term. 

Impact of external shocks related to the situation in the currency markets in Russia and Kazakhstan has increased the volatility of the exchange rate in the first quarter. To smooth out fluctuations and remove the speculative aspects, the National Bank conducted foreign exchange intervention on the sale of U.S. dollars in January-March 2014 which amounted to 198.1 million U.S. dollars. Operations in the foreign exchange market along with other open market operations helped reduce pressure on the exchange rate. Devaluation of som in January-March was 10.8 percent. 

Monetary base in the 1st quarter 2014 decreased by 5.8 billion to 67.4 billion soms (-7.9 percent). Broad money supply M2X decreased by 1.9 percent, to 118.7 billion soms. 

During the discussion, it was noted that the risks of accelerating inflation process in the economy over the medium term remain. The average quarterly rate of inflation was higher than forecast by 0.4 percentage points to 4.7 percent. In annual terms, inflation was 6.3 percent. 

Taking into account the ratio of inflation risks and risks of reduction of external demand, the Board of the National Bank unanimously decided to keep interest rates unchanged at 6.0 percent. 

The picked team of NBKR won the Interbank tournament and won the Cup of banks in Kyrgyzstan  

In 2014, 21 teams from financial institutions in Kyrgyzstan championed for the Cup of Banks in Kyrgyzstan. Based on the results of the draw in the preliminary stage two groups were created. Teams that won the first four places in groups, continued to fight for victory in the quarterfinals. 

According to the results of the group stage, the following banks participated in the quarterfinals: 

In semifinals:  

CJSC “Tolubai” and OJSC “Dos CredoBank” played for the 3rd place in the match. The team of Tolubai Bank was lucky team which managed to score 3 goals and skip just one. Team of the bank won the bronze medal. 

The teams of the National Bank and the Aiyl Bank played in the final match. The team of the National Bank went ahead twice with the efforts of the player Jenish Mamatov but Aiyl Bank each time found the power to equalize the scores. As a result, after regular time was recorded tied score 2:2 and the fate of the final match was decided in the penalty-kick in which goalkeeper of the National Bank Erkin Rasulov managed to reflect the two six-meter strike (penalty-kick: 4:3 in favor of the National Bank). Thus, the National Bank won the Cup of Banks in 2014 and became the 11th time winner of this trophy. 

The awards ceremony of the winning team and the best players in the nominations with the award of prizes ended. Five best players based on the decision of the jury and the Organizing Committee were identified from the teams in the quarterfinals of the tournament: 

• best goalkeeper – Ruslan Emeldzhanov (Tolubai); 

• best defender – Aibek Kyrmanchiev (National Bank); 

• best hitter – Aziz Momunkulov (Dos Credobank); 

• top scorer – Nurlan Djantaev (Amanbank) - scored 34 goals during the tournament; 

• best player of the tournament – Nurjan Dzhetybaev (Aiyl Bank). 

In the category of “Will to Win” prizes were awarded to the team of ‘Bai Tushum” and player of “Bakay Bank” N. Achekeev. 

The ceremony of award was attended by the President of the “Union of Banks of Kyrgyzstan” Mr. A. K. Abdraev, Deputy Chairman of the National Bank of the Kyrgyz Republic Mr. Z. L. Chokoev and Chairman of the Board of “Aiyl Bank” Mr. E. Sh. Asrandiev. 

Interbank annual football tournament for the Cup of Banks of Kyrgyzstan started on April 19, 2014. Organizer of the tournament is the Union of Banks of Kyrgyzstan. 

Licenses/certificates to the following non-financial credit institutions and exchange offices were issued: 

- “Rysbai” LLC (license number 5127 as of May 28, 2014 issued for conducting exchange operations with foreign currency). Registered address: Bazarnaya Street, Batken oblast, Kadamzhai rayon, Ayderken town. 

- “Farad plus” LLC (license number 5128 as of May 28, 2014 for conducting exchange operations with foreign currency). Letter of registration under No. 3119. Registered address: 280 Kurmanjan Datka Street, Bishkek. 

- “ZhilInvestBishkek” LLC (license number 5129 as of May 29, 2014 issued for conducting exchange operations with foreign currency). Letter of registration under number 3120. Registered address: 26 A Logvynenko, Bishkek. 

- “Irina Plaza” LLC (license number 5130 as of May 30, 2014 issued for conducting exchange operations with foreign currency). Letter of registration under number 3121. Registered address: 115 a, Ibraimova, Bishkek. 

Licenses/certificates of the following non-financial credit institutions were annulled and withdrawn: 

The certificate of registration of “Asyl Kapchyk” LLC MCC under No.304 as of March 8, 2010 for micro-crediting of individuals and legal entities was annulled from May 26, 2014 based on the Party’s decision on self-liquidation. A statement from May 19, 2014. Registered address: 83-4, Alamedin-1, Bishkek.  

The certificate of registration of “AKTAN-credit” LLC MCC under No. 471 as of November 13, 2012 for micro- crediting of individuals and legal entities was annulled from May 29, 2014 based on the Party’s decision under No. 2 as of May 22, 2014. Registered address: 50 Kerme-Too Street, Archa Beshik, Bishkek. 

Interbank payments