This trend was influenced by both the increase in the National Bank's key rate and a significant extension of the average maturity of transactions, which increased from 9 days in the second quarter to 22 days during the period under review.
The increase in transaction duration contributed to higher yields, and as market participants adapted to the new liquidity conditions, the spread between the key rate and the repo rate narrowed from (-)5.06 to (-)4.73 percentage points. However, on average for the quarter, the spread slightly widened — from (-)4.87 to (-)4.94 percentage points, while the total volume of transactions fell by 3%.
In the National Bank's notes market, a moderate increase in the weighted average yield was observed in the third quarter, amounting to 0.05 percentage points, which led to an increase to 3.49%. Despite the rise in the key rate, the average spread between the key rate and the yield on notes widened from (-)5.56 to (-)5.76 percentage points. This market continued to experience high demand for notes, which forced the regulator to increase the issuance of 91-day securities and resume the placement of 182-day notes.
In the interbank foreign exchange swap market, the weighted average rate significantly decreased from 6.5% in the second quarter to 4.43% in the third quarter of 2025. This change led to an expansion of the negative spread from (-)2.10 percentage points to (-)4.10 percentage points and a decline in the volume of transactions by 18.6%. The main reason was an excess of som liquidity, which reduced banks' need for swaps for short-term management of currency positions. Additionally, market participants' confidence in the stability of the som exchange rate also put pressure on rates.
As for the yield on 12-month government treasury bills, it continued to converge with the National Bank's key rate: the average spread narrowed from 1.66 percentage points in the second quarter to 1.31 percentage points in the third quarter of 2025. The narrowing of the spread indicates a decrease in the risk and liquidity premium that investors require on government obligations, which reflects an increase in financial market confidence in macroeconomic stability and the monetary policy being pursued.
