The National Bank of Kyrgyzstan provided clarification regarding media reports that the authorities have significantly increased the amount of money in the country's economy over the past three years.
The regulator's press service noted that from the end of 2020 to April 2024, the money supply in the country grew by 175.1 billion soms, from 219.1 billion soms to 394.2 billion soms. This means that the money supply increased by 79.9% during the specified period.
At the same time, over the past three years, the country's GDP grew by 92.1%, from 639.7 billion soms ($7.57 billion) in 2020 to 1.2 trillion soms ($14.2 billion) by the end of 2023. In real terms, Kyrgyzstan's economy increased production by 30.2% from 2020 to 2023. Thus, the growth in the money supply is related to the expansion of the Kyrgyz economy.
The National Bank concluded that to assess the "acceptability" of the money supply growth, it is important to consider the monetization ratio—the ratio of money supply to GDP—which has remained stable at 41-44% over the past three years. This indicates a balance between the amount of money and economic activity.
Another important indicator characterizing the relationship between the money supply and economic activity is the exchange rate dynamic. Over the past two years, the exchange rate of the Kyrgyz som has remained one of the most stable in the region, further confirming that the growing money supply is backed by economic activity in the country.
CentralasianLIGHT.org
September 24, 2024