Kyrgyz Republic: Request for Purchase Under the Rapid Financing Instrument and Disbursement Under the Rapid Credit Facility-Press Release; Staff Report; Informational Annex; and Debt Sustainability Analysis

IMF Staff Country Reports, March 27, 2020

Source details

Canonical URL

Kyrgyz Republic: Request for Purchase Under the Rapid Financing Instrument and Disbursement Under the Rapid Credit Facility-Press Release; Staff Report; Informational Annex; and Debt Sustainability Analysis

Other formats

• Markdown version
• Structured JSON version
• Bundle manifest

Bibliographic details

• Published: March 27, 2020
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781513538693.002

Overview

• Publication date: March 27, 2020
• Subject focus: Credit, Debt sustainability analysis, Economic and financial statistics, External debt, External sector statistics, Financial institutions, Loans, Monetary base, Money, Public debt
• Core message: The COVID-19 pandemic has been hitting the Kyrgyz economy very hard and created an urgent balance of payments need. Emergency IMF support under the Rapid Financing Instrument (RFI) and the Rapid Credit Facility (RCF) is presented as a necessary backstop to increase buffers and shore up confidence.

Macroeconomic impact and balance of payments

• The COVID-19 pandemic impacts all sectors "with extreme severity" as containment measures are implemented.
• An "urgent balance of payments need" has arisen as a result of the pandemic-related shock.
• IMF emergency support via the RFI and the RCF is intended to:
  • provide a backstop,
  • increase buffers,
  • shore up confidence,
  • preserve fiscal space for essential COVID-19-related health expenditure,
  • catalyze donor support.
• Policy note: Expeditious donor support is needed to close the remaining balance of payments gap and ease the adjustment burden.

Financial sector and monetary policy

• Banks’ capital and liquidity buffers need to be used to absorb credit losses and the liquidity squeeze.
• Once these buffers are exhausted, the central bank needs to show flexibility on the timing of bringing capital and liquidity above the minimum required, considering the length of the crisis.

Policy recommendations and priorities

• Provide IMF emergency support under the RFI and the RCF to act as a backstop and increase national buffers.
• Preserve fiscal space for essential COVID-19-related health expenditure.
• Use banks’ capital and liquidity buffers to absorb losses and liquidity pressures.
• Allow the central bank flexibility on timing to restore capital and liquidity above regulatory minima if buffers are exhausted and the crisis persists.
• Secure expeditious donor support to close the remaining balance of payments gap and reduce adjustment pressures.

Content in this bundle

• 1kgzea2020001 - Executive Summary
  • 1kgzea2020001 - Executive Summary (Markdown version)
  • 1kgzea2020001 - Executive Summary (PDF)