It has become more expensive for the National Bank to withdraw excess money from banks

Following the auction held on January 13, the weighted average yield on 7-day NBKR notes rose to 5.11% per annum.

Just two weeks ago, at the auction on December 30, similar securities were placed at an average of 4.89%, with a minimum rate of 3.4% and a maximum of 5.2%. Thus, the rate increased by 0.22 percentage points — a noticeable movement for such a short-term instrument.

National Bank notes are a way to temporarily “take” excess money from banks to balance liquidity in the system. The higher the rate, the more expensive such a withdrawal is for the regulator and the higher the income banks receive for placing funds.

The increase in yield means that it becomes more profitable for banks to place money with the National Bank rather than keep it idle.

On January 12–13, there were 9 billion KGS of National Bank notes in circulation. All of them are long-term securities:

• 5.5 billion KGS — 91-day notes;
• 3.5 billion KGS in 182-day notes.

There were no short-term notes in circulation at that time. Now, 7-day notes have been added to them. However, it is not yet known in what volume; initially, the regulator planned to place 20 billion KGS in notes.