Kyrgyzstan’s banks have once again increased their excess liquidity

Commercial banks in Kyrgyzstan have once again achieved a sustained liquidity surplus. According to data on banks’ reserves in correspondent accounts with the National Bank of Kyrgyzstan, by 10 May 2026 the volume of excess reserves had reached 19.37 billion KGS.

Banks’ funds in correspondent accounts amounted to 78.74 billion KGS, with required reserves standing at 59.37 billion KGS. This means that the banking system retains a significant surplus of free liquidity above the regulator’s requirements.

However, the start of the year looked considerably less stable. As early as mid-January, the banking sector faced a reserve shortfall: on 16 January, the liquidity shortfall exceeded 7.5 billion KGS. A similar situation recurred in February, when some days closed with a shortfall of over 7 billion KGS.

However, the situation changed dramatically in the spring. The most telling example was 2 March, when the volume of banks’ funds in accounts with the National Bank of Kyrgyzstan (NBK) jumped to 119.44 billion KGS, and excess reserves reached 59.51 billion KGS. This is almost equal to the total volume of the banking system’s required reserves.

Following the March surge, indicators remained volatile, with banks shifting from a deficit to a surplus in a matter of days. However, from the end of April, a stable liquidity buffer began to form in the market once again.

In effect, the banking system is currently in a situation where banks have more spare funds than is required to meet regulatory requirements. This usually creates favourable conditions for lending, the purchase of government securities and operations on the interbank market.

At the same time, such sharp fluctuations in reserves may also indicate a high dependence of liquidity on short-term budgetary operations, movements of large payments and the National Bank’s own actions to regulate the money market.