The past week, which coincided with the May holidays, was quite informative. Two international financial institutions immediately announced the provision of financial assistance to Kyrgyzstan in connection with a pandemic totaling more than USD 170 million, and the Government announced the creation of an Anti-Crisis Fund with a potential of KGS 40 billion. In addition, the Tax Service again confirmed tax deferrals for economic entities, and two state-owned banks announced a reduction in interest rates on loans. The National Bank of the Kyrgyz Republic claims that the foreign exchange market in the Kyrgyz Republic remains stable. Overall, the week generated some optimism for the quaraantined population.
Assistance of ADB. This week the Asian Development Bank has approved $50 million in loan and grant financing to help the Government of the Kyrgyz Republic mitigate the significant negative health, social, and economic impacts of the novel coronavirus disease (COVID-19) pandemic.
Delivered under ADB’s COVID-19 Active Response and Expenditure Support (CARES) program, the funds will support the government’s immediate priorities to contain the spread of the pandemic, ensure social protection for vulnerable segments of society, and deliver a pro-poor fiscal stimulus to safeguard small and medium-sized enterprises (SMEs) and the economy’s productive sectors.
Budget expenditures for the quarter. In January-March 2020, cash expenditures of the state budget of the Kyrgyz Republic amounted to KGS 32.5 billion.
According to data of the Central Treasury of the Ministry of Finance of the Kyrgyz Republic, of these, KGS 8.9 billion were allocated for the wages of employees of budgetary organizations, KGS 2.35 billion for the payment of social assistance benefits to the population, and KGS 9.87 billion for the payment of social security benefits.
In addition, almost KGS 9 billion were allocated to finance the costs associated with servicing public debt. The remaining funds are used to finance other priority expenses.
Anti-Crisis Fund of the Kyrgyz Republic. An anti-crisis fund will be created in Kyrgyzstan.
Vice Prime Minister of the Kyrgyz Republic, Erkin Asrandiev said that the second anti-crisis plan was adopted taking into account the opinions of business, donors and deputies of the Jogorku Kenesh.
“The main direction is the creation of an anti-crisis fund, at the expense of which soft loans will be provided to business entities. The plan also provides for an increase in the capital of the Guarantee Fund and a revision of tax obligations for those business entities that temporarily suspended their activities during quarantine,” Asrandiyev said.
Another measure of this anti-crisis plan is the legalization of capital and property, he said.
“This is relevant now. The capital that is in the shade will be activated and involved in economic turnover. In the new version of legalization, we propose new principles, these are the principles of confidentiality of information, the principle of guaranteeing the inviolability of legalized capital, as well as the principle of tax exemption of that part of capital that is reinvested in the economy,” the vice prime minister explained.
RSK Bank network. RSK Bank OJSC has 52 branches throughout the country. In addition, there are 81 additional offices, 133 departments working. 236 ATMs, 1168 post-terminals, 83 cash-in machines have been installed.
Chairman of the Bank Azizbek Omorkulov said that despite the current situation, the bank did not stop its activities for a second. More than 1 thousand employees work and provide services to the public. As part of the emergency, in order to facilitate the access of the population to financial resources, 3 additional savings banks were opened in regions and in Bishkek.
Credit through online. RSK Bank OJSC facilitated the restructuring of citizens' loans for KGS 3 billion.
Head of the bank, Azizbek Omorkulov, said that over KGS 4 billion were received during the state of emergency.
“Today, the bank is actively working on issuing loans, as well as supporting rural producers. As part of agricultural financing, we continue to issue financial resources for the purchase of livestock, processing, and also cluster chains,” said Omorkulov.
He called on citizens who want to take a loan to apply through messengers - write on a piece of paper, take a picture and send via WhatsApp to the number of the bank. Workers will review the application remotely.
Additional assistance of IMF. The Executive Board of the International Monetary Fund approved a purchase of the Kyrgyz Republic under the Rapid Financing Instrument (RFI) USD 80.7 million, and a disbursement under the Rapid Credit Facility (RCF) USD 40.4 million 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 USD 120.9 million 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. This additional disbursement brings the total IMF emergency loan to the Kyrgyz Republic to address the COVID-19 pandemic to USD242.0 million.
Tax recalculation. Taxpayers of the Kyrgyz Republic have the right to receive a recalculation of the amount of tax on the basis of a patent, the validity of which falls on the period of force majeure, as well as to suspend the tax contract for a certain period. Such a right was granted in accordance with the decree of the Government of the Kyrgyz Republic of May 8, 2020.
According to information from the State Tax Service of the Kyrgyz Republic, when resuming activities on the basis of a patent, an entrepreneur submits an application to the tax authority to extend the validity of the patent indicating the date of suspension of activity. An employee of the tax authority is required to indicate in the patent form a mark on the extension of the patent for the remaining unused days from the beginning of the resumption of activity and affix the appropriate stamp.
Non-volatile market. The situation on the currency market of Kyrgyzstan is stable.
Chairman of the National Bank of the Kyrgyz Republic Tolkunbek Abdygulov said that the reserves of the bank amount to USD 2 billion 394 million, which covers 4.5 months of imports.
“These reserves allow the National Bank and the whole country to look into the future with confidence,” he said this week.
The National Bank of the Kyrgyz Republic issued collection coins in honor of 75th anniversary of the Great Victory.
Numizmatists can obtain silver and copper-nickel collection coins «75th anniversary of Great Victory» of the series «Historical Events» as well as copper-nickel collection coin «10 years of the People’s April revolution» of the same series.
Kabar News Agency
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