Republic of Tajikistan and the IMF
Press Release : IMF Completes First Review of the Three-Year Arrangement Under the Poverty Reduction and Growth Facility
July 21, 2003
Country's Policy Intentions Documents
Free Email Notification
Republic of Tajikistan—Letter of Intent, Supplemental Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding
Mr. Horst Köhler
Dear Mr. Köhler:Mr. Managing Director, permit me to take this opportunity to express my gratitude to the International Monetary Fund for its constant support for Tajikistan in the process of its reforms.
During April/May of this year, the Government of Tajikistan held discussions with Fund staff for the first review under the Poverty Reduction and Growth Facility (PRGF) arrangement. Based on these discussions, we have prepared a supplement to the Memorandum of Economic and Financial Policies submitted to you on November 13, 2002. This supplement reflects the impact of recent economic developments on the macroeconomic framework; additional measures we will take to strengthen the structural reform effort; quantitative performance criteria; and structural performance criteria and benchmarks to cover the period April 1–December 31, 2003.
All of the quantitative performance criteria for end-March 2003 were observed. Two of the program's four structural performance criteria were also observed. The continuous performance criterion prohibiting the National Bank of Tajikistan (NBT) from issuing directed credit was not observed.
Since then, no new directed credits have been issued by the NBT and outstanding ones are being repaid. As well, the NBT has begun to restructure its operations and has taken measures to prevent such occurrences in future. The continuous performance criterion prohibiting the accumulation of new external payments arrears was not observed. While we made a payment towards fulfilling our debt service obligations to the U.S. government, this payment was delayed and insufficient to cover late charges. We have since cleared all arrears to the U.S. government and improved our communications with the creditor. The structural performance criterion requiring the unification of gas tariffs was implemented, but with a delay. Based on these remedial actions, we request a waiver for the non-observance of these two continuous and one structural performance criteria.
On the basis of performance during the period up to end-March 2003 and the policies set out in the attached supplemental memorandum of understanding, we request the completion of the first review under the PRGF arrangement.
We believe that the policies described in the supplemental Memorandum attached to this letter (which builds on our earlier understandings) will enhance the prospects for achieving the objectives of our economic program for 2002. We intend to remain in close consultation with Fund staff on the adoption of any measures that may be appropriate, in accordance with IMF policies on such consultations, and will provide the staff with information it requests for monitoring economic developments and progress in the implementation of polices and in reaching the objectives of the program supported by the PRGF arrangement. In addition, we stand ready to take any further measures, in consultation with Fund staff, on economic and financial policies that might be necessary to ensure that the overall objectives of the program can be attained. In order to enhance transparency of our economic policies, we request that this letter, the supplemental Memorandum of Economic and Financial Policies, the Technical Memorandum of Understanding, and the Staff Report be published on the Fund's website.
Please accept, sir, the assurance of my highest consideration for you.
President of the Republic of Tajikistan
Supplemental Memorandum of Economic
and Financial Policies
1. Since 1996, the International Monetary Fund has supported Tajikistan's economic reform program. Most recently, the Fund approved a three-year arrangement under the Poverty Reduction and Growth Facility (PRGF). Although we have achieved some progress with the implementation of the Fund-supported program, there have also been delays and shortcomings resulting from capacity constraints. We failed to observe the two continuous performance criteria prohibiting issuance of directed credits by the NBT and prohibiting the accumulation of new external payments arrears, and the structural performance criterion introducing a unified gas tariff. We have, however, taken appropriate remedial actions on the basis of which we request a waiver for the non-observance of these structural performance criteria. We deeply regret the most recent incident of misreporting due to the accumulation of new external payments arrears. Although in the past we have taken steps to prevent the recurrence of such incidents, we will now intensify our efforts. We have fully implemented the three structural benchmarks for end-December 2002, but with a delay. For end-March 2003, we met all the quantitative performance criteria (Annex I), but missed the structural benchmark for developing a timetable for civil service reform (Annex II). Given these problems, we intend to undertake measures that will strengthen program performance. These measures, along with revised quantitative performance criteria for end-September 2003, are described in this supplemental Memorandum of Economic and Financial Policies (MEFP).
2. Our economic policies have contributed to improved macroeconomic stability and strong growth. In 2002, real GDP grew by 9.1 percent. Based on the strong growth in the first half of 2003, we continue to project real GDP growth of at least 6 percent in 2003. Progress towards price stability, however, was limited; inflationary pressures caused end-period inflation for 2002 to be higher than projected. Because of the spillover of inflation from late 2002, higher energy prices and the changing nature of regional trade, we now expect end-period inflation of 9 percent for 2003. Our fiscal performance remained strong as we were able to achieve a nearly balanced budget because of higher-than-programmed revenue collections. The current account deficit narrowed to 2.8 percent of GDP in 2002 as a result of higher remittances, increased humanitarian aid flows and good harvests. We implemented several important reforms in the energy and banking sectors, but with delays due to capacity constraints.
3. The revised indicative targets for end-June, end-September and end-December 2003 and the performance criteria for end-September 2003 are detailed in Annex III. Structural performance criteria and benchmarks through end-September 2003 are proposed in Annex IV. Performance relative to these targets, criteria and benchmarks will be measured as detailed in the Technical Memorandum of Understanding in Annex V. In addition, we have completed a prior action relating to the development and implementation of a comprehensive mechanism for mitigating the effects of energy sector reforms on poor households.
II. Fiscal Policy
4. Our fiscal policy continues to be prudent. We maintained control over expenditures and modestly increased revenue collections as a share of GDP for 2002. As a result, the overall fiscal deficit, excluding the public investment program (PIP), for 2002 was SM 5.9 million (0.2 percent of GDP), which was less than projected. For 2003, we expect the deficit (excluding the PIP) to be no more than SM 36.4 million, or 0.9 percent of GDP, including increased interest payments due to the 2002 rescheduling agreement with Russia.
5. We plan to refocus our expenditures to better align them with the goals set out in the PRSP. By end-October 2003, we will submit a supplemental budget to parliament that contains indicative targets on health and education expenditures of SM 151.6 million for 2003. These target may be revised in light of overall revenue performance during the next months. We had hoped to complete a detailed classification of budgetary expenditures by end-March 2003, but now expect that it will be finished by end-June 2003. This classification system will provide a basis for improved tracking of expenditures, especially those for the social sectors, and will be used to monitor our indicative spending targets. In order to enhance transparency, we plan to publish our detailed classification of government's education and health expenditures in Tajikistan's national newspapers on a quarterly basis beginning end-June 2003. The publication of this information will provide the public with a breakdown of expenditures by individual facility, e.g., schools and clinics.
6. Although there continues to be an urgent need for increased public investment, we reaffirm our commitment to limit annual disbursements under the public investment program (PIP) to 3 percent of GDP in 2003 and 2004. In light of the recent consultative group meeting, we plan to revise the PIP such that we increase the share of social sector expenditures under the PIP beginning in 2004. Any decision to increase annual disbursements as a share of GDP under the PIP will be taken in consultation with Fund staff and will take into account our revised investment priorities, absorptive capacity, the availability of resources, and the sustainability of our external debt.
7. Continued expenditure discipline requires moderation in civil service wage increases. We raised civil service wages by 20 percent as of April 1, 2003 and will undertake further wage increases in 2003 only to the extent that reductions in civil service employment are achieved. Hence, we will ensure that the civil service wage bill will be no more than SM 120.8 million in 2003. In collaboration with the World Bank, we are developing a timetable for civil service reform that is aimed at reducing staffing levels and improving the efficiency of the civil service. During the first quarter of 2003, we have reduced civil service employment by 5 percent, and we plan further reductions during 2004. We will complete a census of the civil service and construct a database of civil service positions, grades and salaries by end-June 2003.
8. While revenue collection has increased, further improvements are required to sustain our revenue effort over the medium and long-term. To this end, we created a modernization office to oversee a comprehensive improvement of our tax and customs system. The tax and customs codes are currently being revised and we plan to submit the revised versions to government by end-December 2003. The revisions to the tax and customs codes will be based on the recommendations made by the 2002 FAD mission. As of May 1, 2003 (Resolution 153), we harmonized excise rates on imported and domestically produced alcohol products. We plan to complete a comprehensive survey of the number of duties, fees and charges collected by government and other public institutions by end-December 2003. To increase transparency, we will publish on a quarterly basis an inventory of the 50 corporate and individual taxpayers that have the largest tax arrears beginning end-September 2003.
9. In order to improve the performance of customs revenues and to harmonize our tariff structure with that of other Eurasian Economic Community members, we plan to revise the present tariff system. The total number of rates under the new tariff system will be 5, i.e., 0, 2, 5, 10, and 15 percent. We will consult with Fund staff before making changes to this proposal. The government will limit export and import licensing to goods that adversely affect health, environment, or national security. Improved administration of our VAT system is another measure that is critical to revenue collection. By end-June 2003, we will compile and publish an inventory of each VAT refund claim and make these payments by end-September 2003.
III. Monetary Policy
10. The NBT has recently begun implementing a restructuring process that will improve its institutional integrity and the implementation of monetary policy. During the past year there have been several instances when directed credits were issued. Partly as a result of these credits our control over reserve money was inadequate, thereby contributing to inflationary pressures. As part of the restructuring of the NBT, we established a monetary policy committee (MPC) to improve liquidity management. The MPC meets on a weekly basis and issues instructions for the purchase and/or sale of foreign exchange and other monetary instruments. The weekly instructions of the MPC serve as the sole basis for the NBT's monetary policy interventions. Further, the NBT issued a resolution in February 2003 withdrawing lending authority from NBT department heads, branch managers, and deputy chairmen. In May 2003, the NBT issued resolutions that strictly limit the operations of all branches to cash and settlement operations only. Additionally, NBT staff was reduced by more than 10 percent in the six months ending March 2003.
11. We will complete the restructuring of the NBT by end-September 2003 in accordance with the plan agreed with Fund staff. Key elements of this plan include reducing the number of organization units and centralizing all accounting functions into one department. While all these measures will contribute to improving the NBT's financial condition, its net worth remains negative. Therefore, the NBT will not pay any dividends to the Ministry of Finance as long as the NBT's net worth remains negative; further, the NBT will not make any contribution to a deposit insurance scheme.
IV. Structural Policy
12. The main areas of structural reform under the Fund-supported program continue to be banking, energy and agriculture. With regard to banking, we plan to finalize the restructuring of the Agroinvestbank by dividing its operations into two independent corporate entities, one dealing solely with financing cotton production and one that continues its commercial bank operations. This separation into two independent entities will be completed by end-June 2003 and will promote transparency of the bank's operations. Further, by end-June 2003, the NBT and the Ministry of Finance will jointly prepare a plan in consultation with Fund staff, that will ensure that the newly formed bank meets the minimum capital requirement.
13. To further strengthen the banking sector, by end-May 2003, we will revoke the banking licenses of the two commercial banks—in consultation with Fund staff—whose financial condition and lending practices put their deposits at unacceptable risk. We will close or merge these banks by end-September 2003. By end-December 2003, we will eliminate all waivers for the minimum capital requirement. To limit a further erosion of the remaining banks' capital, we will allow banks to hold up to 50 percent of their capital in foreign exchange as of end-December 2003. Further, we will delay an increase in the minimum capital requirement from $1.5 million to $2 million until end-2004.
14. We plan to continue reducing quasi-fiscal deficits in the gas sector. An appropriate compensation mechanism for protecting the poorest households from increases in gas tariffs will be introduced no later than end-June 2003. This mechanism will be effective retroactively from January 1, 2003 and will provide a total of SM 12 million from the budget for the purpose of compensating low income households. The target group for this mechanism will exclude privileged categories of consumers. In April 2003, we increased the gas tariff to SM 180 per thousand cubic meters which includes an adjustment for exchange rate depreciation of 3 percent in Q1 2003 (Resolution 154, March 31, 2003). On July 1, 2003, we will raise gas tariffs to at least SM 200 per thousand cubic meters and increase household norms from 16 cubic meters per person per month to 30 cubic meters per person per month. From October 1, 2003, we will implement the automatic quarterly adjustor of gas tariffs for depreciation in the nominal exchange rate. We will also eliminate all privileged categories of consumers of gas, electricity and heat by end-September 2003. We plan to expand our efforts to improve payment discipline in the energy sector by ensuring that budget entities and state-owned enterprises do not accumulate any new arrears to Naftrason, Barki Tajik, and Tajikgas from end-June 2003 onwards. To increase transparency we will introduce a separate line item for public utility payments in the supplemental budget for 2003.
15. Effective farm restructuring requires addressing the debt burden of the remaining state-owned farms. Although we hoped to resolve this issue by end-December 2002, it proved to be more complex than anticipated. We are presently working with the Asian Development Bank to complete an inventory of farm debt by end-September 2003. Also by end-October 2003, we will finalize a plan for restructuring this debt. The plan will include recommendations to take into consideration the responsibilities of dekhan farms, exporters, government, and other relevant parties.
16. To promote transparency, we hereby request that the letter of transmittal, and the Memorandum of Economic and Financial Policies be published on the IMF website.
REPUBLIC OF TAJIKISTAN
Technical Memorandum of Understanding
1. This memorandum defines variables that constitute quantitative performance criteria and indicative targets under the Poverty Reduction and Growth Facility Arrangement (PRGF), and sets out the reporting requirements for the authorities and the National Bank of Tajikistan (NBT).1
I. Quarterly Targets
A. Fiscal Deficit of the General Government
2. The general government budget is defined to include the republican budget, local (including municipal) budgets, and all extra-budgetary funds at all levels of general government, including the social protection fund (SPF) but excluding the externally financed public investment program. The overall cash deficit of the general government is defined from the financing side as the sum of the following:
3. The augmented deficit of the general government is defined from the financing side as the sum of the same items as in the definition of the overall cash deficit of the general government plus the counterparts (-) to increases in net credits or net claims on the general government from the NBT or commercial banks as a result of the resolution of the bad loans problem under the bank restructuring program. These counterparts consist of the full value of the loans taken over by the government.
4. Monthly data on net claims of the domestic banking system on the general government are taken from the balance sheets of the NBT and commercial banks. The Ministry of Finance shall provide information on, and confirm the amounts of general government deposits held abroad, disbursements of foreign loans to the general government, net sales of treasury bills and other securities, borrowing from the nonbank sector, as well as gross receipts and expenditures of the central government privatization account. It shall provide detailed monthly data on: (i) revenues, expenditures and lending operations of the state and local budgets, as well as all budgetary and extra-budgetary funds; (ii) quasi-fiscal operations; (iii) estimates of the outstanding stock of wage and pension and all other domestic expenditure arrears; and (iv) estimates of the outstanding stock of tax and other revenue arrears to the general government.
5. The ceiling on the cumulative overall fiscal deficit will be adjusted downward by 100 percent for any overdue or rescheduled interest obligations.
B. Tax Collection of the Ministry of State Revenues and Duties
6. Tax collection include all taxes collected by the Ministry of State Revenues and Duties. With regard to internal taxation excluded from the definition is: any tax offsets or in?kind payments, sales taxes on cotton and aluminum exports, taxes, charges, and fees collected by the Social Protection Fund, and any proceeds from loans, or other banking system credits, the issuance of securities, or from the sale of state assets. With regard to foreign taxes, custom revenues are defined to include import duties, export duties and taxes, customs duties, exchange taxes, and other taxes (including VAT) on international trade and transactions.
C. Limits on the Stock of Net Domestic Assets of the NBT
7. Net domestic assets (NDA) of the NBT are defined as: reserve money minus net foreign assets of the NBT. Reserve money is composed of currency in circulation, required reserves, other bank reserves, and deposits of non-government non-banks with the NBT. Net foreign assets of the NBT includes net international reserves in convertible currencies. The NBT's net domestic assets comprises the following assets and liabilities: net credit to the general government, claims on banks, credit to the economy, and other items net (OIN). OIN includes, the foreign exchange re-valuation and capital accounts of the NBT.
8. The NDA ceiling should be also adjusted for changes in reserve requirements, in accordance with the following formula:
∆NDA = ∆rBο + rοΔB + ΔrΔB
where rο denotes the reserve requirement ratio prior to any change; Bο denotes the programmed level of the reservable base money in the period prior to any change; ∆r is the change in the reserve requirement ratio; and ΔB denotes the immediate change in the reservable base with respect to the programmed base money level as a result of changes in the definition.
9. The ceiling on net domestic assets of the NBT will be adjusted: (i)
downward/upward by 100 percent for excesses/shortfalls of the disbursement
of (non-project) foreign loans and cash grants; (ii) downward/upward by
100 percent for the excesses/shortfalls of privatization receipts; (iii)
downward by 100 percent for any overdue or rescheduled debt service obligations;
and (iv) upward by 100 percent for withdrawals from government project
accounts at the NBT in excess of programmed levels and downward by 100
percent for disbursements in excess of programmed levels.
D. Limits on Net Credit of the Banking System to General Government2
10. Net credit of the banking system to the general government is the sum of net credit from the NBT to general government and net credit from the rest of the domestic banking system to general government, both as defined in section A above.
11. The ceiling on net credit of the banking system to general government will be adjusted: (i) downward/upward by 100 percent for excesses/shortfalls of the disbursement of (non-project) foreign loans and cash grants; (ii) downward/upward by 100 percent for the excesses/shortfalls of privatization receipts; and (iii) downward by 100 percent for any overdue or rescheduled debt service obligations.
E. Net International Reserves
12. Total net international reserves of the NBT are defined as the difference between total gross international reserves of the NBT and total reserve liabilities of the NBT. Total gross international reserves of the NBT are defined as the NBT's holdings of monetary gold, holdings of SDRs, any reserve position in the IMF, holdings of convertible currencies in cash or in nonresident banks that are readily available. Also included are holdings of foreign currency-denominated securities issued by governments or central banks of OECD member states. Excluded are capital subscriptions in foreign financial institutions, non-liquid assets of the NBT, convertible currency denominated claims on domestic banks and other residents, assets in non-convertible currencies, foreign assets pledged as collateral or otherwise encumbered and the net forward position, if any (defined as the difference between the face value of foreign currency denominated NBT off balance sheet claims on nonresidents and foreign currency obligations to both residents and non-residents). Reserve liabilities of the NBT are defined as outstanding IMF credit, and liabilities of the NBT to nonresidents with an original maturity of up to and including one year.
13. For the purpose of program monitoring, U.S. dollar denominated components of the balance sheet will be valued at the program exchange rate, and other foreign currency denominated items will be valued at cross rates between the program exchange rate of the U.S. dollar and current official exchange rates of the U.S. dollar against those currencies. Official gold holdings shall be valued at US$333.25 per troy ounce.
14. Fund staff will be informed of details of any gold sales, purchases, or swap operations during the program period, and any resulting changes in the level of gross foreign reserves that arise from revaluation of gold will be excluded from gross reserves (as measured herein).
F. Limits on Short-, Medium-, and Long-Term External Debt
16. The external debt limits (short-, medium- and long-term) apply to the government of Tajikistan, the National Bank of Tajikistan and any other agency acting on behalf of the government. For short, medium- and long-term external debt, the performance criterion applies not only to debt as defined in point No. 9 of the Guidelines on Performance Criteria with Respect to Foreign Debt (Decision No. 12274-(00/85), adopted August 24, 2000), but also to commitments contracted or guaranteed for which value has not been received.
17. The definition of debt set forth in point No. 9 of the guidelines reads as follows: "(a) For the purposes of this guideline, the term "debt" will be understood to mean a current, i.e., not contingent, liability, created under a contractual arrangement through the provision of value in the form of assets (including currency) or services, and which requires the obligor to make one or more payments in the form of assets (including currency) or services, at some future points in time; these payments will discharge the principal and/or interest liabilities under the contract. Debts can take a number of forms, the primary ones being as follows: (i) loans, i.e., advances of money to obligor by the lender made on the basis of an undertaking that the obligor will repay the funds in the future (including deposits, bonds, debentures, commercial loans, and buyers' credits) and temporary exchanges of assets that are equivalent to fully collateralized loans under which the obligor is required to repay the funds and usually pay interest, by repurchasing the collateral from the buyer in the future (such as repurchase agreements and official swap arrangements); (ii) suppliers' credits, i.e., contracts where the supplier permits the obligor to defer payments until some time after the date on which the goods are delivered or services are provided; and (iii) leases, i.e., arrangements under which property is provided which the lessee has the right to use one or more specified period(s) of time that are usually shorter than the total expected service life of the property, while the lessor retains the title to the property. For the purpose of the guideline, the debt is the present value (at the inception of the lease) of all lease payments expected to be made during the period of the agreement excluding those payments that cover the operation, repair or maintenance of the property. (b) Under the definition of debt set out in point 9(a) above, arrears, penalties, and judicially awarded damages arising from the failure to make payment under a contractual obligation that constitutes debt are debt. Failure to make payment on an obligation that is not considered debt under this definition (e.g., payment on delivery) will not give rise to debt."
18. External debt limits apply to the contracting or guaranteeing of new nonconcessional short term external debt (with an original maturity of up to and including one year), and to the contracting or guaranteeing of new nonconcessional medium- and long-term external debt (with original maturities of more than one year).
19. Excluded from the external debt limits are loans contracted for the purpose of debt rescheduling or refinancing if the terms of the new loan are more favorable. IMF credit is excluded from the external debt limits. The performance criterion on new nonconcessional short-term external debt will not apply to loans classified as international reserve liabilities of the NBT (liabilities of the NBT to nonresidents with an original maturity of up to and including one year). Normal import-related financing is excluded from the performance criterion on new short-term external debt.
20. Debt falling within the external debt limits that are denominated in currencies other than the U.S. dollar shall be valued in U.S. dollars at the exchange rate prevailing at the time of contracting or guaranteeing takes place or at the exchange rate stipulated in the contract.
21. For the purposes of the program, the guarantee of a debt arises from any explicit legal obligation of the government or the NBT or any other agency acting on behalf of the government to service such a loan in the event of nonpayment by the recipient (involving payments in cash or in kind), or indirectly through any other obligation of the government or the NBT or any other agency acting on behalf of the government to finance a shortfall incurred by the loan recipient.
22. Concessionality will be based on currency-specific discount rates based on the OECD commercial interest reference rates (CIRRs). For loans of an original maturity of at least 15 years, the average of CIRRs over the last 10 years will be used as the discount rate for assessing the concessionality of these loans, while the average of CIRRs of the preceding six-month period will be used to assess the concessionality of loans with original maturities of less than 15 years. To the ten-year and six month averages of CIRRs, the following margins will be added: 0.75 percent for repayment periods of less than 15 years; 1 percent for 15?19 years; 1.15 percent for 20-30 years; and 1.25 percent for over 29 years. Under this definition of concessionality, only loans with grant element equivalent to 35 percent or more will be excluded from the debt limits.
II. Continuous Quarterly Targets
A. No Directed Credits by the NBT
23. The NBT will not issue any directed credits. These involve credits that are issued in the absence of a competitive auction or on non-market terms and conditions. This requirement will be monitored on the basis of changes in the NBT's balance sheets supported by the NBT's regular reporting on the results of its credit auctions, including interest rates, and amounts bid and received.
B. No Non-Core Activities of the NBT and no Dividend Payments by the NBT
24. The NBT will not make any expenditures not related to its core business activities or pay dividends while it has negative net worth.
C. No New External Payments Arrears
25. No new external payments arrears shall be accumulated at any time under the PRGF arrangement, excluding those which are subject to negotiation among creditors. External payments arrears are defined as overdue debt service arising in respect of obligations incurred directly, guaranteed, or converted into interstate debt by the government of Tajikistan or the NBT, including penalties or interest charges.
D. Exchange and Payments Arrangements
26. Over the next six months, the Republic of Tajikistan will not: (i) impose or intensify restrictions on the making of payments and transfers for current international transactions; (ii) introduce or modify multiple currency practices; (iii) conclude bilateral payments agreements which are inconsistent with Article VIII of the IMF's Articles of Agreement; or (iv) impose or intensify import restrictions for balance of payments reasons.
E. No Expenditure Arrears of the General Government
27. No new arrears of the general government on wages and of the Social Protection Fund on transfer payments for non-working pensioners' pension payments to its regional offices shall be accumulated at any time under the PRGF arrangement.
28. For purposes of the performance criterion, expenditure arrears shall be defined as any shortfall in monthly disbursements on wages and in transfers from the Social Protection Fund to its regional offices. A monthly disbursement plan will be presented to the Fund staff by the 15th day of the month preceding the month of actual wage and pension payments.
29. To permit monitoring as defined above, the government will provide data on actual wage payments and on transfers from the Social Protection Fund to its regional offices to the IMF staff in the form of treasury reports and statements from the Social Protection Fund on a monthly basis no later than 14 days after the end of each month.
III. Continuous Indicative Targets
A. Reserve Money
30. Somoni reserve money of the NBT is defined as the sum of: (i) domestic currency issued by the NBT; (ii) deposits of commercial banks and other financial institutions held with the NBT; and (iii) deposit liabilities of the NBT with respect to the public. Deposits of the general government are excluded from reserve money, but are included under NDA. NBT reserve money liabilities with respect to commercial banks and other financial institutions comprise all deposits held by these institutions at the NBT, including required reserves and excess reserves held in the correspondent accounts, but excluding NBT liabilities held by commercial banks and other financial institutions in the form of short term NBT notes. Deposit liabilities of the NBT to the public include all deposits placed at the NBT, in domestic or foreign currency, by the nonbank public.
B. New Arrears by Budget Entities and State-Owned Enterprises
31. Budget entities include all entities that are included in the state budget law. Key state-owned enterprises are Tadaz, Nitrogen (Sarband city), and Tajikcement.
C. Education and Health Expenditures
32. Education and health expenditures include education and health expenditures at all levels of government.
1 Quantitative targets are
based on a program exchange rate of SM 3.0 = US$1 and SDR 1 = US$1.366.