Monday, March 27, 2017

Kyrgyzstan holds rate, sees inflation at target end-year

     The central bank of the Kyrgyz Republic left its benchmark discount rate steady at 5.0 percent, saying this should support economic growth as there are no external or internal risks to inflation.
     The National Bank of the Kyrgyz Republic (NBKR) confirmed its statement from February that it expects inflation to be close to its target of 5-7 percent by the end of this year.
     The central bank has maintained its rate since December last year when it last cut its rate as part of a 500-basis-point easing cycle that started in March 2016.
     The NBKR said this past easing had helped reduce short-term domestic rates, which are currently fluctuating within the bank's interest rate corridor.
     Inflation in Kyrgyzstan, south of Kazakhstan and east of China, rose to 1.3 percent in February from 0.5 percent in January and then further to 2.6 percent as of March 17 due to higher food prices and a hike in tobacco taxes.
     A gradual recovery of domestic consumption is stimulating economic activity, the NBKR said, adding the economy grew by 5.4 percent in the January-February period.
     Excluding output from the Kumtor gold mine, the growth rate was 3.6 percent, with positive trends seen in all key sectors of the economy.
    The domestic foreign exchange market remains stable, the central bank said, adding the exchange rate of the som had appreciated by 0.5 percent between the start of 2017 and March 25, with the central bank not intervening in the market during the month of March.



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