IMF Executive Board Approves a US$121.1 Million in Emergency Assistance Under the Rapid Financing Instrument and Rapid Credit Facility for the Kyrgyz Republic to Address the COVID-19 Pandemic
New Delhi: The Executive Board of the IMF approved US$ 121.1 million in emergency assistance to the Kyrgyz Republic. This is the second IMF emergency loan under the RFI/RCF for the Kyrgyz Republic since the outbreak of the pandemic:
The IMF emergency support addresses the urgent balance of payments need, shores up confidence, and catalyzes donor support.
To ensure that the financing provided is efficiently spent on addressing the crisis, the authorities have committed to strengthen procurement rules.
Washington, DC – The Executive Board of the International Monetary Fund (IMF) approved a purchase of the Kyrgyz Republic under the Rapid Financing Instrument (RFI) equivalent to SDR 59.2 million (US$ 80.7 million, 33 percent of quota) and a disbursement under the Rapid Credit Facility (RCF) equivalent to SDR 29.6 million (US$ 40.4 million, 17 percent of quota) to meet the urgent balance of payment needs stemming from the outbreak of the COVID-19 pandemic.
This is the second IMF emergency assistance under the RFI/RCF for the Kyrgyz Republic since the outbreak of the pandemic: on March 26, 2020, the IMF Executive Board approved a disbursement of US$ 120.9 million (see IMF Press Release No. 20/115) before it doubled the access of the annual access on emergency financing under the “exogenous shock” window of the RCF to 100 percent of quota on April 6, 2020 (see IMF Policy Paper No. 20/018 ). This additional disbursement brings the total IMF emergency loan to the Kyrgyz Republic to address the COVID-19 pandemic to US$ 242.0 million.
The outbreak of the pandemic has weakened the macroeconomic outlook and opened a balance of payments gap estimated at about US$500 million. There is an unprecedented high level of uncertainty surrounding this projection. The IMF emergency support will finance health and economic relief, shores up confidence, and catalyzes donor support. To ensure that the financing provided is efficiently spent on addressing the crisis, the authorities have committed to strengthen procurement rules.
Following the Executive Board discussion, Mr. Tao Zhang, Deputy Managing Director and Acting Chair, made the following statement:
“The COVID-19 pandemic has hit the Kyrgyz economy very hard and increased an already urgent balance of payments need. All sectors are being severely affected while measures are being taken to stop the spread of the virus. Given the unprecedented high level of uncertainty, IMF emergency support under the Rapid Financing Instrument and the Rapid Credit Facility is expected to help finance health and economic relief, shore up confidence, and catalyze donor support. Expeditious additional donor support is needed to close the remaining balance of payments gap and ease the adjustment burden. In this context, the authorities’ intention to apply for the Debt Service Suspension Initiative, supported by the G-20 and Paris Club, and use released resources to finance spending on COVID-19 related health or economic relief, is welcome.
The health care contingency plan and the initial package of economic measures already adopted by the authorities to provide health and economic relief are welcome, as is the second, larger, package of measures under preparation.
To ensure that financing provided is efficiently spent on addressing the crisis, the authorities will strengthen public procurement rules by publishing an ex-post validation of delivery along with the name of awarded companies and their beneficial owner(s) for all public procurement contracts.”