Kyrgyzstan Drafts $419 Million Plan to Curb Rising Prices

Kyrgyzstan has drafted a plan worth about $419 million to curb rising prices in 2026–2027. The authorities aim to increase food production and build reserves, but fuel imported primarily from Russia remains a major source of inflationary pressure largely beyond the government’s control. The draft was presented to the Cabinet on August 21. During the first seven months of 2026, consumer prices and tariffs in Kyrgyzstan rose by 6.7% from their December 2025 level. Average annual inflation over the same period was 10.7%. Food prices rose particularly sharply, with fresh fruit up 16% and meat products 14.5%. Lamb recorded the largest increase at 23.1%. Horse meat rose by 16%, while beef increased by 14.2%. The authorities have already intervened directly in the meat market. In March, Kyrgyzstan introduced a six-month ban on livestock exports. Temporary state controls on beef and mutton prices also applied earlier this year but expired on May 2. The plan calls for increasing the productive livestock population by at least 20,000 head. Agribusinesses will be eligible for preferential loans, while the dairy and poultry sectors will receive subsidies. Storage facilities with a combined capacity of 18,000 metric tons are planned in all seven regions. Farmers are to receive 68,000 metric tons of seed and the necessary amounts of mineral fertilizer. The government also intends to ensure sufficient wheat supplies for the domestic market and purchase another 20,000 metric tons from local producers for state reserves. The draft would establish direct supply channels for agricultural products and expand the network of retail outlets operating without intermediaries. Kyrgyzstan relies on imports for almost all of its petroleum products. Deputy Energy Minister Nasipbek Kerimov said in July that Russia had supplied about 95% of the country’s annual fuel needs in recent years, with total consumption of around 2 million metric tons. This summer, Russia’s fuel shortages worsened amid refinery outages following Ukrainian drone attacks, high seasonal demand, and transport problems. Moscow tightened restrictions on fuel exports and turned to imports to support domestic supplies. For Kyrgyzstan, the decline in Russian supplies quickly became a problem. According to the National Statistical Committee of the Kyrgyz Republic, the average price of AI-92 gasoline reached 88.24 soms per liter by August 12, around 6% above the July average. AI-95 rose by 12% to 109.24 soms, while diesel increased by 5% to 102.08 soms. The government has already raised its year-end inflation forecast to 14–15% from an earlier projection of 9%, citing rising fuel costs as one reason. The National Bank of the Kyrgyz Republic kept its policy rate at 12% on July 27. Among the external inflation risks, the central bank cited volatile global food prices and possible disruptions to petroleum-product supplies through the Strait of Hormuz. Its medium-term inflation target is 5–7%. Kyrgyzstan cannot quickly replace Russian fuel, but importers have begun seeking supplies farther afield. Kanatbek Eshatov, president of the Association of Oil Traders of Kyrgyzstan, said on August 12 that reduced supplies from Russian refineries had prompted deliveries from...

Kazakhstan Central Bank Chief Sees No Pressure on Tenge After Rate Cut

Kazakhstan’s central bank governor has sought to calm concerns over the tenge after the National Bank cut its base rate for the first time since October 2025, saying demand for local-currency assets should remain stable despite lower returns. The National Bank of Kazakhstan lowered its base rate to 17% from 18% on June 5, citing slowing inflation and an improved economic outlook. The decision was based on updated assessments of inflation risks and key macroeconomic indicators, the bank said. Annual inflation slowed to 10.4% in May from a peak of 12.9% recorded in September last year. The central bank also raised its oil price assumption for the remainder of 2026 to $90 per barrel for Brent crude. National Bank Governor Timur Suleimenov said the rate cut would lower returns on tenge-denominated deposits but would not trigger a significant shift into foreign-currency assets. “Interest rates on tenge deposits remain substantially higher than returns on foreign-currency deposits,” Suleimenov told reporters. “A one-percentage-point reduction will not fundamentally change the attractiveness of deposits or other tenge-denominated assets such as corporate bonds and government securities.” Suleimenov said demand for local-currency assets is expected to remain stable, limiting pressure on the exchange rate. He acknowledged that the tenge could face seasonal pressure during the summer because of increased demand for foreign currency linked to overseas travel and dividend payments by Kazakhstani companies listed on international exchanges. However, he said Kazakhstan’s economic fundamentals remain supportive of the national currency. “Oil prices are rising, while metal prices have increased by an average of around 17%, with some commodities gaining as much as 40%,” Suleimenov said. “If there are no major external shocks, I see no reason for any significant weakening of the tenge.” The central bank also revised its inflation forecast for 2026 downward to a range of 9%-11%, compared with a previous estimate of 9.5%-11.5%. Its inflation forecast for 2027 remains unchanged at 5.5%-7.5%. Suleimenov said the bank expects inflation to approach its long-term target of 5% by 2028 as external inflationary pressures ease and government and central bank measures take effect. “The slowdown in inflation during April and May gave us room to lower the base rate,” he said. “But it would be premature to say inflation has been defeated. Future decisions will depend on incoming data and our assessment of risks.” The official exchange rate stood at 487.4 tenge per U.S. dollar on June 7. The outlook remains cautious. As previously reported by The Times of Central Asia, S&P Global Ratings forecast that the tenge would average around 540 per dollar in 2026, reflecting expectations of a weaker currency over the medium term.