Monday, March 30, 2015

Kyrgyzstan maintains rate as inflation continues to ease

    The central bank of the Kyrgyz Republic left its benchmark discount rate steady at 11.0 percent, noting that even if inflation was slowing, the country's economy remains under the influence of external factors.
   The National Bank of the Kyrgyz Republic, which has raised its rate by 500 basis points since July 2014 to curb inflationary pressures from the depreciating som currency, said the economy of its main trading partners continues to slow down, impacting the domestic economy through the channels of foreign trade and lower remittances along with pressure in the foreign exchange market.
    As of mid-March, the inflation rate eased to 8.6 percent from 10.5 percent at the end of 2014 with high economic growth in the first two months of 9.5 percent mainly due to rising output at the Kumtor open-pit gold mining site.
    Excluding Kumtor, located about 220 miles southeast of the capital of Bishkek, the country's economy expanded by 3.8 percent, the central bank said.
    The central bank added that it would continue to take appropriate measures to achieve a medium-term inflation rate of 5.7 percent.
    The som began depreciating in August 2014 and was trading at 63.89 to the U.S. dollar today, down 7.8 percent since the start of the year.


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