Press Release: IMF Approves Augmentation of ESAF Loan to Kyrgyz Republic
March 4, 1999
The International Monetary Fund (IMF) has approved a request by the Government of the Kyrgyz Republic to augment by SDR 8.88 million (about US$12 million) the IMF’s financial support under the current three-year Enhanced Structural Adjustment Facility (ESAF),1 approved by the Executive Board on June 26, 1998, in the amount of SDR 64.5 million (about US$88 million). See (Press Release No. 98/27. The augmentation, which is intended to help counter the impact of the Russian financial crisis on the Kyrgyz economy, will be available as part of the second loan under the first annual ESAF arrangement. The Executive Board made the decision in conjunction with the completion of the mid-term review of the first year of the ESAF.
The program supported by the ESAF was designed to consolidate the gains in macroeconomic stabilization and structural adjustment achieved under Kyrgyz Republic’s first three-year ESAF-supported program, and to address the remaining deficiencies in creating a sustainable environment for continued growth based on a dynamic private sector. While implementation of the current program was broadly satisfactory during the first few months, the suddenness and magnitude of the external shock caused by the onset of the Russian crisis confronted the Kyrgyz authorities with the challenge of responding quickly and appropriately to the new external environment. The authorities have acted decisively to strengthen the program through significant tightening of financial policies and a reemphasis on the program’s structural component.
The Kyrgyz Republic joined the IMF on May 8, 1992. Its quota is SDR 88.8 million (about US$121 million). Its outstanding financial obligations to the IMF currently total the equivalent of SDR 124 million (about US$170 million).
1 The ESAF is a concessional IMF facility for assisting eligible members that are undertaking economic reform programs to strengthen their balance of payments and improve their growth prospects. ESAF loans carry an interest rate of 0.5 percent a year and are repayable over 10 years, with a 5 ½-year grace period.