The Government of Tajikistan has instructed relevant ministries and agencies to speed up the process of coordination and attraction of a concessional loan from the International Monetary Fund (IMF).
The instruction is one of 50 items of “The Plan of Actions to Prevent the Impact of Possible Risks on the National Economy” (Plan of Actions), adopted by the country’s Government.
Under this Plan of Actions, the National Bank of Tajikistan (NBT), the Ministry of Finance (MoF) and the Ministry of Economic Development and Trade (MoEDT) are instructed “to complete further negotiations with the IMF on launching a new program.”
It is about completion of negotiations with the IMF in the framework of the Extended Credit Facility (ECF) program.
The Extended Credit Facility (ECF) provides financial assistance to countries with protracted balance of payments problems. The ECF was created under the Poverty Reduction and Growth Trust (PRGT) as part of a broader reform to make the Fund’s financial support more flexible and better tailored to the diverse needs of low-income countries (LICs), including in times of crisis. The ECF is the Fund’s main tool for providing medium-term support to LICs.
Negotiations on IMF concessional financial support between the Government of Tajikistan and the IMF began in October 2015 but they were suspended in 2020 due to COVID-19 pandemic.
In the summer last year, Tajikistan’s financial regulator announced the resumption of these negotiations, and the possibility of launching the ECF program discussed in August last year and in February this year.
The previous three-year program, in the framework of which the IMP provided more than 160 million U.S. dollars to Tajikistan in concessional financial support, expired in July 2012.
In the framework of the new program, initially, it was planned to attract a concessional loan of US$500 million. Later it was said about US$300 million.
According to the NBT, these funds are planned to be used to support macroeconomic and financial stability, payment balance and sustainability of the country’s international reserves.
According to data from a MoF, the rest of NBT’s debt to the IMF has amounted to 1.8 million U.S. dollars as of January 1, 2022. These funds have reportedly been spent to maintain the balance of payments.
Besides, in May 2020, the IMF approved a US$189.5 Million Rapid Credit Facility (RCF) Disbursement to Tajikistan to address the COVID-19 Pandemic.
