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National Bank of Kyrgyzstan introduces overnight deposits as new monetary policy instrument

February 15, 2014

On February 17, the National Bank of Kyrgyzstan will introduce a new instrument of monetary policy overnight deposits, the press service of the National Bank reported. Overnight deposit is a short-term account that gives the opportunity to deposit one's funds in the bank with a fixed interest rate for the term of 1 day from the current date until the bank's next working day. The committee on monetary regulation has decided to set the overnight deposit rate at 1.0%. Introduction of the new instrument is aimed at strengthening the work of percentage transmission channel of the monetary policy towards the real economy. Goal of the monetary policy is to achieve and maintain price stability. This instrument will give impetus to commercial banks to reconsider their percentage policy, and subsequently increase the flow of money into the banking system by reducing the cash component, the statement said.

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Source: AKIpress News Agency (Kyrgyz Republic)

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