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ADB to allocate $1 bln for Kazakhstan for implementing government programs

21 August 2015 [15:16] - TODAY.AZ

/By AzerNews/

By Aynur Karimova

The Asian Development Bank has approved a loan for Kazakhstan worth $1 billion to assist the Central Asian nation to continue implementing government programs aimed at strengthening the national economy in the face of recent challenges.

“This loan from ADB’s Countercyclical Support Facility will give the country the fiscal leeway it needs to mitigate the unanticipated and significant negative impacts of the steep decline in world oil prices and the economic slowdown of the neighboring countries,” Lotte Schou-Zibell, Principal Economist in the Central and West Asia Department, said. “It will help the government modernize infrastructure and maintain spending programs for job creation, social services, support to low-income households, and private sector development, particularly for small businesses.”

The programs will be supported by transfers from the National Fund of Kazakhstan, ADB’s loan, and proposed funding from other development partners.

The ADB loan will support efforts to stabilize the economy following the recent move by the government and the National Bank to adopt a free floating exchange rate together with inflation targeting.

On August 20, Kazakh Prime Minister Karim Massimov announced that Kazakhstan had launched a new monetary policy based on a free-floating tenge rate and canceled the currency corridor. The weighted average rate of tenge fell to 255.26 tenge per dollar from 188.38 tenge on August 19 on the Kazakhstan Stock Exchange for the first trades after the announcement.

The loan, from ADB’s Ordinary Capital Resources, will be released in two tranches of $500 million each, and will support the implementation of key policy reforms. The loan has a 5-year term, with the interest rate determined in accordance with ADB’s LIBOR-based lending facility, plus 200 basis points.

ADB is a key development institution in Kazakhstan, delivering a total of $3.2 billion in the form of 25 public sector loans, $31 million for around 68 projects, and $455 million for six private sector projects since 1994.

URL: http://www.today.az/news/regions/143098.html

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