Kyrgyzstan's central bank left its key rate, the discount rate, at 5.0 percent, and retained its neutral policy stance, saying it would "take appropriate" monetary policy measures depending on inflation and the economy.
The National Bank of the Kyrgyz Republic (NBKR), which has maintained its rate since December 2016, added that it expects inflation to remain within its medium-term target of 5.0 to 7.0 percent as world food markets are stable while domestic consumer demand is being restored.
Kyrgyzstan's inflation rate eased to 3.2 percent in January and to 3.4 percent as of Feb. 16 from 3.7 percent in December.
Kyrgyzstan's economy is strengthening on the back of domestic demand with Gross Domestic Product in January rising by 2.3 percent, excluding the Kumtor gold mine. Including Kumtor, GDP expanded by 3.4 percent.
In the third quarter of last yer, Kyrgyzstan's economy grew 5.0 percent year-on-year, down from 6.0 percent, for 2017 growth of 4.5 percent as remittances surged 25 percent in U.S. dollar terms.
The Kyrgistani som has been buffeted in recent months with an excess supply of currency, prompting several NBKR interventions. The International Monetary Fund in January called on the central bank to restrict its interventions to solely smoothing out excessive volatility so the exchange rate can act as a shock absorber and thus deliver macroeconomic benefits.''
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