At the press conference, the Deputy Chairman of the National Bank, Azat Kozubekov, explained in detail how changes in the discount rate affect the credit market and mortgage lending. According to him, in the economy of Kyrgyzstan, monetary policy primarily impacts the deposit market. Changes in the discount rate directly affect the returns on deposits.
When deposit rates increase, it makes savings in the national currency more attractive for both the population and businesses. As a result, there is an increase in demand for soms, which reduces pressure on the foreign exchange market and helps control inflation.
However, the impact of the discount rate on credit products manifests with a certain delay and indirectly. Kozubekov noted that the effect on loan rates, including mortgages, has a more prolonged nature.
He also added that the regulator takes into account the potential impact on credit activity and economic growth rates when making its decisions.
At the National Bank, it is believed that inflation has a much more negative impact on economic activity than the moderate influence of changes in the discount rate on the cost of loans, which stretches over time.
Thus, the primary priority of monetary policy remains ensuring price stability, even if it requires a gradual adjustment of lending conditions.
