As inflationary pressures continued to abate, the central banks of Kyrgyzstan and Tajikistan cut their policy rates sharply since the beginning of 2012. With economic growth slowing and policy rates already low, the prospect of a rise in food price inflation in late 2012 created a potential policy dilemma. Although the refinancing rate has not been changed since September 2011, the bank's conduct of monetary policy would have only a limited impact on inflation due to its weak institutional capacity and the relatively undeveloped domestic debt market.