President of the Kyrgyz Republic Sooronbai Zheenbekov on May 10, 2020 received the Chairman of the National Bank of the Kyrgyz Republic Tolkunbek Abdygulov.
They discussed measures to ensure the stability and security of the banking and payment systems, a stable macroeconomic situation in the context of the impact of the coronavirus infection on the world economy.
The head of state noted the importance of maintaining the stability of the financial and banking system, the purchasing power of the national currency, and macroeconomic stability in the country.
He drew attention to the importance of minimizing risks for the national economy in the situation taking shape in international financial markets and economies of countries in connection with the spread of coronavirus infection.
He emphasized the need to support economic sectors, business entities, and the population, which were negatively affected by the consequences of the spread of coronavirus infection.
Also, President Sooronbai Zheenbekov drew attention to the importance of intensifying the work on digitalization of banking services, the introduction of a remote identification system that allows transferring customer service to digital platforms as much as possible and increasing their convenience in receiving services.
The Chairman of the National Bank, Tolkunbek Abdygulov, noted that in an emergency and state of emergency, the banking and payment systems continue to smoothly carry out payment, transfer operations and timely meet the needs of the economy and the population in banking services and cash.
Payments and settlements are also carried out using digital financial services provided by commercial banks on a remote basis and through banking equipment installed in all regions of the country: 1744 ATMs, 11260 POS-terminals and 1927 payment terminals.
In addition, Tolkunbek Abdygulov spoke about the measures taken by the National Bank to mitigate the negative economic consequences of the spread of coronavirus infection, as well as support for business entities and the public.
It is noted that, along other measures, the National Bank recommended financial and credit organizations to grant borrowers a deferral of loan payments for a period of at least three months and for bade imposing fines and penalties for late payments on loans, charging and charging fees when revision loan agreement terms.
According to the Chairman of the National Bank, commercial banks have restructured 90.151 loans totaling 58.1 billion KGS as part of the provision of concessions to borrowers.
President Sooronbai Zheenbekov noted the need to strengthen control over the process of restructuring loans by commercial banks, taking into account the individual approach to each client.
The Executive Board of the International Monetary Fund has approved the provision of emergency assistance to Kyrgyzstan in amount of 121.1 million USD. This is the second IMF emergency loan provided by the Kyrgyz Republic under the RFI/RKF since the beginning of the pandemic. This was reported on the IMF website.
Thus, within the framework of the Accelerated Financing Instrument (RFI), 80.7 million USD was provided, which is 33% of the quota, and 40.4 million was allocated 17% of the quota under the Accelerated Credit Facility (RKF).
“To eliminate the remaining balance of payments deficit and ease the burden associated with the necessary adjustments, it is urgent to attract additional assistance from donors. In this regard, we welcome the intention of the authorities to request a suspension of debt service support initiative supported by the Group of Twenty and the Paris Club and spend the released funds on measures to overcome the consequences of COVID-19 in the health sector or in the economy”, according to a statement by deputy managing director Tao Zhang.
In addition, it is noted that the IMF welcomes the emergency contingency plan in the healthcare sector, already approved by the official authorities of the Kyrgyz Republic, and the initial plan of economic measures to eliminate damage to health and the economy, as well as the forthcoming larger package of measures.
“In order to ensure the efficient use of the funds provided to overcome the crisis, the country’s authorities will strengthen public procurement rules by publishing documents confirming the actual delivery, along with the name of the companies which were awarded the contract, and their beneficial owner in relation to all public procurement contracts”, said in a statement.
Recall that on March 26, 2020, the IMF approved the allocation of 120.9 million USD, after which a decision to double the annual amount of emergency funding available under the “exogenous shock window” provided by the RKF to 100% of the quota was made on April 6.
On behalf of President Sooronbai Zheenbekov, 5 billion 250 million KGS will be allocated in the coming months to support the country’s economy from the National Bank. This was announced by the Chairman of the National Bank, Tolkunbek Abdygulov.
The distribution of these funds within the framework of the anti-crisis plan will be as follows:
- 1 billion KGS – for working capital;
- 5 billion KGS – to finance agriculture;
- 1 billion KGS – to microcredit companies;
- 750 million KGS (through Keremet Bank) – to support SMEs;
- 1 billion KGS – to increase the authorized capital of Guarantee Fund.
It should be noted that the gold and foreign exchange reserves of the National Bank of the Kyrgyz Republic amount to 2 billion 394 million USD, or 4.5 months of import.