Press Release No. Press Release No.04/133

Press Release: IMF Completes Fifth Review of the Kyrgyz Republic's Three-Year PRGF Arrangement and Approves US$14 Million Disbursement

June 30, 2004

The Executive Board of the International Monetary Fund (IMF) has completed the fifth review of the Kyrgyz Republic's economic performance under the three-year Poverty Reduction and Growth Facility (PRGF) arrangement. This enables the Kyrgyz Republic to draw an amount equivalent to SDR 9.56 million (about US$14 million), which will bring the total amount drawn under the arrangement to the equivalent of SDR 63.84 million (about US$93.6 million).

Completion of the review followed the World Bank's decision on June 29, 2004 that there is a continued basis for the provision of World Bank concessional financial assistance. On June 23, 2004, the IMF's Executive Board also concluded, on the basis of the First Progress Report, that the National Poverty Reduction Strategy paper submitted by the Kyrgyz Republic continues to provide a sound basis for IMF concessional financial assistance.

The Executive Board approved the three-year arrangement effective on December 6, 2001 (see Press Release No. 01/49) for a total of the equivalent of SDR 73.4 million (about US$107.6 million).

The PRGF is the IMF's concessional facility for low-income countries. PRGF-supported programs are based on country-owned poverty reduction strategies adopted in a participatory process involving civil society and development partners and articulated in the Poverty Reduction Strategy Paper (PRSP). This is intended to ensure that PRGF-supported programs are consistent with a comprehensive framework for macroeconomic, structural, and social policies to foster growth and reduce poverty. PRGF loans carry an annual interest rate of 0.5 percent and are repayable over 10 years with a 5½-year grace period on principal payments.