IMF Executive Board Approves a US$120.9 Million Disbursement to the Kyrgyz Republic to Address the COVID-19 Pandemic
March 26, 2020
- The IMF Executive Board approves the first request for emergency financial assistance to help its member countries address the challenges posed by COVID-19.
- The approval of the request from the Kyrgyz Republic will make available US$120.9 million to the authorities to meet the urgent balance of payment needs stemming from the outbreak of the COVID-19 pandemic: helps catalyze donor support and free resources for essential COVID-19-related health expenditure.
- To absorb the shock of the pandemic, the government is appropriately implementing a temporary loosening of macroeconomic and financial policies.
Washington, DC The Executive Board of the International Monetary Fund (IMF) approved a
purchase of the Kyrgyz Republic under the Rapid Financing Instrument (RFI)
59.2 million (US$ 80.6 million at today’s US$/SDR exchange rate, 33 percent
of quota) and a disbursement under the Rapid Credit Facility (RCF)
equivalent to SDR 29.6 million (US$ 40.3 million at today’s US$/SDR
exchange rate, 17 percent of quota) to meet the urgent balance of payment
needs stemming from the outbreak of the COVID-19 pandemic.
This is the first IMF emergency loan under the RFI/RCF worldwide since the
outbreak of the pandemic.
The outbreak of the pandemic has weakened the macroeconomic outlook for the
Kyrgyz Republic and opened a balance of payments gap estimated at about
US$400 million. There is an unprecedented high level of uncertainty
surrounding this projection.
The IMF support helps provide a backstop, increase buffers, and shore
up confidence for the Kyrgyz economy. It also helps catalyze donor
support and preserve fiscal space for essential COVID-19-related health
To absorb the shock of the pandemic, the government is appropriately
implementing a temporary loosening of macroeconomic and financial policies.
Following the Executive Board discussion. Ms. Kristalina Georgieva,
Managing Director and Chair, made the following statement:
“The COVID-19 pandemic has been hitting the Kyrgyz economy very hard and
created an urgent balance of payments need. All sectors
are being impacted with extreme severity as 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 helps
provide a backstop and increase buffers and shore up confidence. It also
helps to preserve fiscal space for essential COVID-19-related health
expenditure and catalyze donor support.
“To address the crisis, macroeconomic and financial policies need to be
loosened. A temporary increase in headline inflation owing to the weakening
of the exchange rate needs to be accommodated. Monetary policy needs to
gradually bring inflation back within its target range next year.
Flexibility in the exchange rate needs to be maintained to restore external
“A temporary widening of the budget deficit is appropriate, provided it can
be fully financed with donor financing.
In the short run, the priority is to safeguard health spending and
create space for increasing health and other spending once the full
impact of mitigation measures is assessed.
In the medium run, the budget deficit will need to be reduced to lower
levels once the crisis abates.
“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
“Expeditious donor support is needed to close the remaining balance of
payments gap and ease the adjustment burden.”
IMF Communications Department
PRESS OFFICER: Randa Elnagar
Phone: +1 202 623-7100Email: MEDIA@IMF.org