The National Bank of the Kyrgyz Republic lowered its policy interest rate by 200 basis points to 8% on March 29, the bank disclosed after a meeting of the board.
The decision was based on the continuing downward trend of the inflation rate, which is mainly driven by falling domestic prices for food and petroleum products, according to the central bank’s statement. Consumer price index (CPI) “declined by 0.71% (as of March 18), reaching 0.8% in annual terms”, the statement said. Given the current slowdown in economic activity in the country, the decision to lower the policy rate “will support measures to stimulate the real sector of economy to restore its upward trend while maintaining low inflation risks in the current year”.
The National Bank expects “moderate inflation growth” in 2016 at “the lower limit of 5-7%”, the statement added. Maintaining the 5% to 7% inflation rate is the bank’s “policy for the medium term”.
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