Kyrgyzstan holds rate, says economy improving

     The central bank of the Kyrgyz Republic maintained its policy rate at 6.0 percent to help neutralize the deflationary environment and thus bring inflation back to within its target.
    The National Bank of the Kyrgyz Republic (NBKR), which has cut its rate by 400 basis points this year, added that economic activity is reviving, with the economy expanding by 0.4 percent in the January-August period compared with a contraction of 1.2 percent in the January-July period.
    However, manufacturing is continuing to decline, mainly due to lower output from the Kumtor gold mine, and there is still weak demand for domestic products.
     Excluding output from Kumtor, data the central bank bases its monetary policy on,  the economy grew by 2.1 percent in the first eight months, the NBKR said in a statement from Sept. 26.
    Consumer price inflation declined to 0.5 percent in August from 1.2 percent in July but by Sept. 16, the overall price level fell by an annual 0.4 percent, the central bank said, adding that reduced domestic demand continues to limit the growth of consumer prices.
    The NBKR targets inflation of 5-7 percent.
    The central bank said the domestic foreign exchange market had remained stable - its policy aims to smooth any sharp fluctuations - and since the start of the year the som had risen 9.4 percent as of Sept. 23.
    Today the som was trading at 68.3 to the U.S. dollar, up 11.1 percent from 75.9 at the start of the year.
   
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