"Approved"  

by the decision of the Monetary Policy Committee  

dated September 17, 2025, No. 36  

 

 

Methodology 

for the Calculation of the Interbank Benchmark Interest Rate of the Kyrgyz Republic 

(BIR – Bishkek Interbank Rate) 

 

1. This Methodology for calculating the interbank benchmark interest rate of the Kyrgyz Republic (hereinafter referred to as the Methodology) defines the procedure for calculating and publishing the official benchmark interest rate based on actual interbank repo transactions with a 7-day maturity in the national currency (som). The Interbank Benchmark Interest Rate (BIR) is a benchmark interest rate that serves as an indicator of short-term funding costs in the interbank money market of the Kyrgyz Republic. The BIR interbank benchmark rate is intended to serve as a reliable reference for financial market participants, reflecting the actual conditions of the short-term money market in the country. 

2. The purpose of this Methodology is to ensure transparency and consistency in determining the official benchmark interest rate. The Methodology may be revised in accordance with established procedures in the event of changes in market conditions or regulatory requirements 

Calculation Methodology 

3. Primary Data Source: The benchmark interest rate is calculated based on the interest rates of interbank repo transactions actually concluded between commercial banks with a 7-day maturity in the national currency (som). The calculation is performed every business day (Day T) based on transactions executed on Day T by the end of the operating day. 

4. Rate Calculation Algorithm: If one or more 7-day repo transactions in the national currency were concluded on the interbank market on Day T, a volume-weighted average interest rate for these operations is calculated. The average rate is calculated as a volume-weighted average: the interest rates of all qualifying repo transactions for Day T are weighted by the volume of each transaction. 

5. The calculation formula is presented as follows:

Where:– interest rate for the -th interbank repo transaction; – volume of the -th transaction; – total number of interbank transactions per day. 

The resulting weighted average value is rounded to two decimal places (i.e., to the nearest hundredth of a percent / one basis point) for publication. 

6. Annual Calculation Basis: The benchmark rate is expressed as an annual percentage based on a 365-day year. This means that regardless of the actual term of the operation (7 calendar days), the rate is presented in terms of annual yield using a 365-day interest base. Thus, the rate for each repo transaction used in the calculation and the final weighted average value are treated based on 365 days. 

 

Substitution Mechanism 

7. In the event that no transactions satisfying the primary calculation criteria occur on Day T, a fallback mechanism is applied in the following order: 

1) Last Observed Value: If there are no 7-day interbank repo transactions on Day T (no deals were concluded), and no more than 5 business days have passed since the date of the last actual transaction, the last available observed rate value is adopted as the benchmark interest rate for Day T. This ensures the continuity of the benchmark rate series during short-term periods when no new transactions occur. 

2) Synthetic Rate: If interbank 7-day repo transactions are absent for a period exceeding 5 consecutive business days, a synthetic approach is applied to calculate the benchmark rate. The synthetic rate is calculated as follows: 

a) Base calculation based on the National Bank's "Overnight" rate: The current interest rate on "Overnight" deposits of the National Bank on Day T is used. Based on this rate, the effective yield for 7 calendar days is calculated using daily compounding (compound interest) on a 365-day basis:

Where: – the overnight deposit rate, in % per annum. 

b) Converted to an annual rate on a 365-day basis:

c) Next, the spread S is determined as the arithmetic mean of the differences between the actual 7-day repo rates and the synthetic rates for the last (up to 5) business days (m) in which real transactions took place:

d) The average spread is added to the base value :

e) The resulting value is rounded to two decimal places (i.e., to the nearest hundredth of a percent) for publication. 

 

Note: 

- If, within the last 5 business days, data is available for fewer than 5 days with actual transactions (for example, transactions occurred on only 1–2 days within this interval), the available previous observations are used to calculate the spread (i.e., the average spread is calculated based on the specific days when transactions did occur). 

- If transactions are absent for an extended period (up to 45 days) and statistical observations are insufficient for a reliable spread assessment, the National Bank reserves the right to apply expert judgment or a separate decision (within the framework of a Methodology review) to determine the value. 

8. The application of the fallback mechanism guarantees the continuity of the benchmark interest rate publication even under conditions of low market activity. Furthermore, the chosen approach (using the last available rate in the absence of data and transitioning to a synthetic calculation during more prolonged absences of operations) ensures a balance between the rate's relevance and its stability. This avoids sharp fluctuations during isolated absences of trading while simultaneously adapting to changing market conditions during temporary disruptions in repo market activity.