The National Bank of Kyrgyzstan has reduced the size of the discount rate by two percent, its chairman Tolkunbek Abdygulov said today at a press conference.
According to him, meeting of the Board of the National Bank took place yesterday. Basing on the data on the economic situation in the country and the world, the medium-term forecasts, it was decided to reduce the size of the discount rate by two percent.
"The general price level shows a downward trend, mainly due to a decrease in the cost of food and fuel. The consumer price index fell by 0.71 percent in March. In annual terms, inflation was 0.8 percent. The low economic activity is observed in the countries - major trade partners of the Kyrgyz Republic. It still has an impact on the domestic economy through trade and remittances," Tolkunbek Abdygulov said.
"Taking into account the low price growth, the decline in economic activity in the country, the National Bank considers it possible to reduce the size of the discount rate. It will support measures to stimulate the economy for the positive growth of trajectory while maintaining a low risk of inflation this year. National Bank expects a moderate increase in prices in 2016, which value is closer to the lower level of inflation rate of 5-7 percent by the end of the year. Despite the current dynamics of prices decline, inflationary pressures persist in the medium term," he added.
The next meeting of the Board of the National Bank of the Kyrgyz Republic on the discount rate is expected on May 30.