IMF grants 2 mln usd to Kyrgyz under poverty reduction, growth facility plan

from Forbes

MUMBAI (Thomson Financial) - The International Monetary Fund (IMF) said it has completed the fifth review of the Kyrgyz Republic's economic performance under the three-year Poverty Reduction and Growth Facility (PRGF) arrangement, enabling the release of about 2 mln usd and bringing total disbursements under the arrangement to about 12.1 mln usd.

The IMF has also approved the authorities' request to extend the PRGF arrangement until May 31, 2008, to allow for the completion of the sixth and last review.

The Kyrgyz authorities have maintained firm macroeconomic policies, meeting the end-June 2007 quantitative targets under the PRGF-supported program. Their economic program for the rest of 2007 and 2008 aims at limiting the inflationary impact of the recent external shock from higher food prices, while sustaining economic growth to improve living standards, the IMF said.

The monetary authorities are committed to restrain unsterilized intervention in the foreign exchange market, continue to enhance indirect instruments of monetary control, and raise policy interest rates further if needed, the IMF said.

'Fiscal prudence needs to remain the linchpin of macro-economic stability and debt sustainability, and will require efforts to contain the upward drift in current spending observed recently. This will involve refraining from further across the board wage increases, moving forward with broad civil service reform, and designing a comprehensive pension reform that puts the pension system on a sound financial footing,' the IMF said.