National Bank of Kyrgyzstan has lowered interest rate from 10% to 8%

Almaty. March 29. Silkroadnews - The National Bank of Kyrgyzstan lowers the interest rate to 8%, KyrTAG reports.
“On March 28, 2016, the board of the National Bank of Kyrgyzstan decided to decrease the interest rate by 200 basis points. As of March 29, 2016, the interest rate is 8%. This decision was based on the current situation analysis and the National Bank’s forecasts on the future economic development of the country,” the chairman of the National Bank of the Kyrgyz Republic Tolkunbek Abdygulov said at the press conference on Tuesday.

According to him, for 18 days of March the consumer prices level fell by 0.71%.

“Compared to last March, prices rose by 0.8%. Low inflation contributes to decrease of local prices for food and fuel. It all develops against the background of positive price situation at the world food and raw materials markets. Retaining the low global oil prices caused the decline in economic activities in the countries which are major trade partners of Kyrgyzstan,” the head of the National Bank said.

He also explained, currently the domestic economy experiences a recession, to put it more exactly, economic decline for January-February 2016 made about 7-8%. Yet this decline was mainly due to the decrease in production at the “Kumtor” field, not taking into account “Kumtor” the slowdown in GDP growth made 0.1% only.

“The current currency market situation is characterized as a stable. Since the beginning of 2016 som exchange rate against the US dollar has strengthened by 6.7%. At present the official rate is 70,84 som per 1 US dollar. Taking into account the current situation and prospects for the economy development the National Bank considers it necessary to provide measures to boost the economic development and, thus, decided to lower the interest rate to 8%,” T. Abdygulov added.

“In plain language, the cost of borrowing from the National Bank is now lowered. Earlier, three weeks ago, the initial interest rate at last credit auction was 10%. Now on for the next credit auctions the starting rate will be 8%. This should affect the value of money and the interest rate to the final beneficiaries of credit,” he explained.