Published
12/03/2025, 10:03The National Bank published the results of auctions for 7- and 182-day notes held on December 2. The weighted average yield on the shortest-term securities rose to 6.15%, which is almost 76% higher than a week earlier, when the yield was 3.43%.
The sharp rise in rates reflects a change in the short-term expectations of market participants and increased pressure on liquidity in the banking sector.
As part of December trading, the National Bank placed two issues. 7-day notes worth 20 billion KGS, with a yield of 6.15%, and 182-day notes worth 1 billion KGS, with a yield of 6.75%. Given that the maximum yield on these types of securities is limited only by the discount rate (11%) for 7-day notes and the overnight rate (13%) for 182-day notes, the yield remains within the limits set by the National Bank of the Kyrgyz Republic.
Despite this, the yield on notes has grown significantly, especially on 7-day notes. This is evident in comparison with the previous auction held on November 25, when the yield on them was 3.43%, and the maximum reached 3.5%.
The medium-term securities segment is showing more moderate dynamics. Thus, at the auction on October 28, 182-day notes were placed at 5.5%. That is, the yield increased by 1.25 percentage points.
The increase in the yield on National Bank notes is obviously related to the revision of the discount rate by the NBKR Board on November 25. Specifically, it was raised by 100 basis points, from 10% to 11%, in order to slow down inflation, which stood at 9.3% in October, compared to the National Bank of the Kyrgyz Republic's target range of 5%-7%. As a result, the overnight loan and deposit rates also rose by 1 percentage point, to 13% and 5%, respectively.
