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Inflation in 2014 increases by additional 3% due to growth of currency exchange rates – National Bank

Due to the rising currency exchange rates caused by speculative demand, inflation in 2014 increased by additional 3%, according to a bill of the National Bank on amendments and additions to some legislative acts of Kyrgyzstan.

Stock-jobbing at the market of foreign currency in cash, which is created and kept by exchange offices, forms artificial devaluation expectations among the population and business structures.

As a result, the people start to transfer assets in national currency into assets in foreign currency.

“This move leads to additional pressure on the exchange rate, acceleration of KGS devaluation and, consequently, increase in imported inflation,” the statement said.

Earlier, the inflation rate in Kyrgyzstan amounted to 8.9% for the first 11 months of 2014.

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