{
  "title": "Kyrgyz Republic: Selected Issues",
  "publication": "IMF Staff Country Reports, March 4, 2024",
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  "summary": "This Selected Issues paper undertakes a detailed analysis of the inflation dynamics and its determinants in the Kyrgyz Republic to shed light on the unprecedented inflationary surge since 2021.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- This Selected Issues paper undertakes a detailed analysis of the inflation dynamics and its determinants in the Kyrgyz Republic to shed light on the unprecedented inflationary surge since 2021.\n- It employs two complementary methodologies to model a complex interplay between domestic and global factors, and policy variables.\n- The paper constructs a new comprehensive measure of inflation expectations, encompassing both adaptive and forward-looking components.\n- As an additional novelty, the paper introduces external variables to the Phillips curve framework."
    },
    {
      "heading": "Major findings",
      "content": "- Global food prices have historically driven inflation in the Kyrgyz Republic.\n- Domestic factors have become more prominent contributors to inflation in recent years.\n- Liquidity conditions now have a much stronger contribution to inflation than previously observed.\n- There is a disconnect between policy interest rates and market liquidity, weakening monetary policy transmission."
    },
    {
      "heading": "Methodology highlights",
      "content": "- Two complementary modeling approaches are used to capture interactions among domestic factors, global developments, and policy variables.\n- A new comprehensive measure of inflation expectations is constructed that includes both adaptive and forward-looking components.\n- External variables are incorporated into the Phillips curve framework as an additional innovation."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- To strengthen the effectiveness of monetary policy and support the National Bank of Kyrgyz Republic’s intended transition to an inflation-targeting framework, excess liquidity needs to be drained and brought in conformity with the policy rate.\n- Discontinuation of central bank’s participation in the domestic gold market is required, as it is identified as the main source of liquidity injections.\n\n---\n\n Content in this bundle\n\n- Kyrgyz Republic: Selected Issues; IMF Country Report No. 24/65; January 19, 2024\n  - Kyrgyz Republic: Selected Issues; IMF Country Report No. 24/65; January 19, 2024 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Kyrgyz Republic: Selected Issues; IMF Country Report No. 24/65; January 19, 2024 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: March 4, 2024",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400269462.002",
    "This Selected Issues paper undertakes a detailed analysis of the inflation dynamics and its determinants in the Kyrgyz Republic to shed light on the unprecedented inflationary surge since 2021.",
    "It employs two complementary methodologies to model a complex interplay between domestic and global factors, and policy variables.",
    "The paper constructs a new comprehensive measure of inflation expectations, encompassing both adaptive and forward-looking components.",
    "As an additional novelty, the paper introduces external variables to the Phillips curve framework.",
    "Global food prices have historically driven inflation in the Kyrgyz Republic.",
    "Domestic factors have become more prominent contributors to inflation in recent years.",
    "Liquidity conditions now have a much stronger contribution to inflation than previously observed.",
    "There is a disconnect between policy interest rates and market liquidity, weakening monetary policy transmission.",
    "Two complementary modeling approaches are used to capture interactions among domestic factors, global developments, and policy variables.",
    "A new comprehensive measure of inflation expectations is constructed that includes both adaptive and forward-looking components.",
    "External variables are incorporated into the Phillips curve framework as an additional innovation.",
    "To strengthen the effectiveness of monetary policy and support the National Bank of Kyrgyz Republic’s intended transition to an inflation-targeting framework, excess liquidity needs to be drained and brought in conformity with the policy rate.",
    "Discontinuation of central bank’s participation in the domestic gold market is required, as it is identified as the main source of liquidity injections.",
    "**Kyrgyz Republic: Selected Issues; IMF Country Report No. 24/65; January 19, 2024**"
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