Kyrgyzstan’s banks have once again begun borrowing more actively from one another

The volume of repo transactions—a mechanism whereby banks effectively borrow money from one another against collateral in the form of securities for short-term periods—has begun to recover in Kyrgyzstan’s interbank market. Such transactions are typically used to quickly replenish liquidity.

According to data from the National Bank, after a sharp decline in activity in 2024, the volume of transactions began to grow again in 2025. While the market had nearly ground to a halt last summer, with some months showing a volume of less than 500 million KGS, the figure reached 1.5–2.4 billion KGS again in May–August 2025.

At the same time, the cost of such borrowing decreased. The weighted average repo rate, which exceeded 10% in the first half of 2024, fell to approximately 4% by the end of the year and has remained stable since then.

Banks also began borrowing funds for longer terms more frequently. In August 2025, the average maturity of transactions approached 15 days—the longest for the entire period under review.

For the financial market, this may signal a gradual stabilization of the liquidity situation and growing confidence among market participants. Simply put: banks are once again more willing to lend money to one another.