Transactions in Accordance with International Practice

The Kyrgyz Republic has taken significant steps to modernize its financial system by introducing a new framework for transactions that aligns with international best practices. This framework outlines the National Bank’s roles and responsibilities in various transactions, including:

Purchase and Sale of Government Securities

• The National Bank will engage in buying and selling government securities on the domestic market to ensure liquidity and stability.

Foreign Exchange Transactions

• The bank will participate in foreign exchange markets, purchasing and selling foreign currency as needed:
  • To manage international reserves
  • Conduct monetary policy
  • Protect economic interests

Precious Metal and Stone Transactions

• The National Bank will buy and sell precious metals and stones, both domestically and internationally, to maintain gold and foreign exchange reserves.

Foreign Exchange Policy

The National Bank is responsible for developing and implementing a unified foreign exchange policy in the Kyrgyz Republic (Article 23), aiming to promote:

Stability

Transparency

Efficiency

Exchange Rate Management

• The official exchange rate will be determined by the National Bank based on market spot exchange rates and other market indicators.
• The bank reserves the right to announce an official exchange rate without obliging itself to buy or sell foreign currency at that rate (Article 25).

Foreign Exchange Transactions in the Kyrgyz Republic

• Settlements and payments in foreign currency within the country will be carried out according to National Bank-established procedures (Article 26).
• The sale and purchase of cash and non-cash national and/or foreign currency can only be conducted through licensed banks, financial institutions, and exchange bureaus.

Movement of Foreign Currency and Currency Values

• The movement of foreign currency to/from abroad, as well as the transfer of currency values not convertible into currency, will not be restricted provided they are declared at customs control points in accordance with customs legislation (Article 27).
• The National Bank may restrict cash foreign currency, currency values, or precious metals if necessary:
  • To fulfill international obligations
  • Protect economic security

Freedom of Movement of Funds and Capital

• Receipts and transfers of capital to/from abroad will not be restricted, ensuring the free flow of funds and investments in the Kyrgyz Republic (Article 28).

These developments aim to promote a more stable and efficient financial system in the Kyrgyz Republic, aligning with international best practices and fostering greater economic cooperation.