The Executive Board of the International Monetary Fund approved allocation of $ 120.9 million to Kyrgyzstan to address COVID-19 pandemic. IMF website says.
The IMF has allocated Kyrgyzstan $ 80.6 million through the Rapid Financing Instrument (RFI) and $ 40.3 million — under the Rapid Credit Facility (RCF).
This is the first IMF emergency loan under the RFI/RCF worldwide since the outbreak of the pandemic.
The first request for emergency financial assistance was approved to help the fund member countries solve problems related to COVID-19. The money will allow the government of Kyrgyzstan to meet the urgent balance of payment needs stemming from the outbreak of the COVID-19 pandemic. It also stimulates donor support and provides free resources for healthcare system spending.
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.The International Monetary Fund
«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 expenditure,» the IMF says.
Kristalina Georgieva, IMF Managing Director and Chair stated that 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.
«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 balance,» she said.