IMF considering possibility of new support program for Tajikistan
By Kamila Aliyeva
A delegation of the International Monetary Fund (IMF) headed by Padamja Khandelwal arrived in Tajikistan to discuss the new Extended Credit Facility (ECF) assistance program, Avesta reported.
Representatives of the Fund discussed issues related to the new program with First Vice Chairman of the National Bank of Tajikistan Jamoliddin Nuraliev.
Nuraliev informed the guests about macro-economic situation and its prospects, development of monetary, fiscal and real sectors.
He drew the attention of the Fund's representatives to the prospects of remittances, the establishment of financial and trade relations with Turkey and Uzbekistan at a qualitatively new level, the implementation of the Rogun project and related agreements, and the requirements for external financing in the coming years (2019-2021).
Nuraliyev also spoke about plans to place the next installments of Eurobonds on international markets.
It is expected that representatives of the IMF during their visit will meet with the leadership of other relevant ministries and departments of the republic to study the programs of economic reforms.
Khandelwal noted that the mission will make efforts to expand cooperation and implement a new program of assistance to the country.
The new program is planned to focus on supporting of the economic strategy of the Republic of Tajikistan, achieving of macroeconomic and financial stability and sustainability along with economic growth and poverty reduction, as well as maintaining of the balance of payments and sustainability of the country's international reserves.
Negotiations on granting Tajikistan a soft loan under the new program of the IMF “Extended Credit Facility (ECF)” have been protracted for several years.
The 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. The ECF may also help catalyze additional foreign aid.
The ECF supports countries’ economic programs aimed at moving toward a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth.
The term of the previous three-year program, under which the IMF provided Tajikistan with a soft loan of more than $160 million, was completed in July 2012.
In autumn 2012, the Tajik authorities have applied to the IMF for a new three-year arrangement under the extended credit facility.
The IMF representatives that time reportedly raised hopes of coordinating the next three-year program. However, the negotiations on this subject are still continuing and now specific agreements have been reached so far.
The negotiations of the official delegation of Tajikistan with the IMF on the development of a new program under the above mechanism began in October 2015.
Within the framework of the new program Tajikistan intended to attract a $500 million preferential loan from the IMF for supporting the country's economy.
The representatives of the Fund said at the end of the IMF mission to Tajikistan in May this year, the Tajik authorities were seeking to discuss a possible program to support the country.
It was noted in the final statement that, the negotiations on the new program could begin in the coming months, after "careful preparation of both parties, the authorities of Tajikistan and the IMF staff."
"They (the authorities of Tajikistan) have already taken steps to demonstrate the progress of reforms in order to pave the way for negotiations on the program," the statement said.
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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva
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