Kyrgyzstan to retain stable currency
By Tony Pizur
June 14th, 2016, The CACI Analyst
After the ruble crashed in 2014, the Kyrgyz Central Bank (KCB) prevented Kyrgyzstan’s national currency, the som, from depreciating in tandem with the Russian currency. Given Kyrgyzstan’s ascension into the Eurasian Economic Union (EEU) and the country’s heavy reliance on remittances from expatriates living in Russia, the KCB’s decision to maintain a relatively strong Kyrgyz currency seems counterintuitive. However, the stable som policy is predicated on long-term structural changes in trade patterns toward China. With the Chinese currency tied to the U.S. dollar, the decision to keep the som stable is based more on central bank policies in Washington and Beijing than in Moscow.
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