Press Release No. 12/261

Press Release: IMF Executive Board Completes First Review Under Stand-By Arrangement for the Republic of Kosovo; Approves €47.96 Million Disbursement

July 17, 2012

The Executive Board of the International Monetary Fund (IMF) completed the first review of the Republic of Kosovo’s economic performance under a program supported by a Stand-By Arrangement (SBA). The decision, which was taken on a lapse of time basis¹, enables the authorities to draw an additional SDR 39.108 million (about €47.96 million or about
US$58.90 million), bringing total disbursements under the arrangement to SDR 43.359 million (about €53.17 million or about US$65.30 million). After the disbursement, the authorities intend to fund the central bank’s special reserves fund for emergency liquidity assistance to banks.

Kosovo has remained largely shielded from the euro area crisis due to limited trade and financial linkages. Real GDP growth for 2012 is projected at 3.8 percent, supported by robust remittances and capital inflows that originate, to a large extent, with the Kosovar diaspora. Inflation has remained contained. Macroeconomic and financial policies are broadly on track, with all end-April 2012 and continuous quantitative performance criteria under the program having been met.

The Executive Board approved a 20-month SBA for the Republic of Kosovo on April 27, 2012 (see Press Release No. 12/154) in an amount of SDR 90.968 million (about €111.55 million or about US$137.00 million). The key objectives of the authorities’ program are to restore a sustainable fiscal position and sufficient government cash buffers, anchor fiscal policy through the introduction of a fiscal rule, and enhance the resilience of the financial system.

¹ The Executive Board takes decisions under its lapse of time procedure when it is agreed by the Board that a proposal can be considered without convening formal discussions.