In the second quarter of 2024, commercial banks in Kyrgyzstan brought 1.3 trillion KGS to their cash desks, but the population and companies took even more, increasing the volume of cash withdrawals. Against the background of growing cash in circulation, the return of money to the banking system began to decline.

As of July 1, 2024, there were 222.6 billion KGS in circulation in Kyrgyzstan, of which 7.7 billion KGS were in the cash desks of commercial banks, and the remaining 214.9 billion KGS were outside the banking system.

Compared to the same period last year, the volume of money in circulation increased by 36 billion KGS, which is equivalent to an increase of 20.1%.

Cash or non-cash, that is the question

In the second quarter of 2024, cash offices of commercial banks across the country received 1.27 trillion KGS, which is 167 billion KGS (or 15.2%) more than a year earlier.

Receipts peaked in April, when 448.3 bln KGS were deposited in cash offices - 100 bln more than in April 2023. However, already in May, revenues began to decline, by 6.65%, and in June - by another 4.76%.

Despite the impressive volumes of receipts, cash withdrawals exceeded them. In the same period, 1.29 trillion KGS was disbursed through banks' cash desks, which is 25.5 billion more than deposited. Cash withdrawals grew by 15.9% year-on-year, or 177.4 billion KGS more.

The largest amount of cash was also withdrawn in April - 456.1 billion KGS, and then cash withdrawals began to decrease: in May - 424.2 billion KGS, in June - 410.7 billion KGS.

It should be noted that in the same period last year, the volume of cash withdrawals also exceeded deposits.

More money stays out of banks

The return rate of cash to commercial banks' cash offices in the second quarter of 2024 was 98%, 0.6% lower than last year. This indicator reflects how efficiently money is returned to the banking system after it has been disbursed.

A decline in the return rate may suggest that more money has started to stay out of the banking system.

Interestingly, in some regions the return rate declined more than in others. In Osh, the deviation to April-June 2023 was -2.8 percentage points, in Bishkek - -0.9, and in Jalal-Abad region - -0.6. At the same time, Naryn region showed an increase in the return rate by 2.7 percentage points, indicating a more active return of money to the banks' cash offices.

At the same time, Chui and Batken regions showed the highest level of cash repayment - 100.4% and 100.2%, respectively. This means that in these regions the volume of cash returned to banks even exceeded the amounts disbursed.