ORDER OF THE GOVERNMENT OF THE KYRGYZ REPUBLIC

of March 22, 2012 No. 188

About the Strategy of national debt management of the Kyrgyz Republic for 2012-2014

For the purpose of effective management of public debt of the Kyrgyz Republic, and also further market development of government securities of the Kyrgyz Republic the Government of the Kyrgyz Republic decides:

1. Approve the Strategy of national debt management of the Kyrgyz Republic for 2012-2014 according to appendix.

2. To impose control of execution of this resolution on department of finance of Government office of the Kyrgyz Republic.

3. This resolution becomes effective from the date of official publication.

Appendix

The strategy of national debt management of the Kyrgyz Republic for 2012-2014

1. Introduction

The order of the Government of the Kyrgyz Republic of June 23, 2009 No. 400 approved the Strategy of national debt management of the Kyrgyz Republic for 2009-2011 (further - Strategy for 2009-2011) for ensuring requirements of the Government of the Kyrgyz Republic for financing with the smallest long-term costs and in case of acceptable risk level. Strategy for 2009-2011 provided further decrease in ratio of public debt of the Kyrgyz Republic to the gross domestic product (GDP) and increase in share of financing in national currency due to domestic market.

Due to completion of term of strategy implementation for 2009-2011, and also change of macroeconomic country situation and in the world, the Government of the Kyrgyz Republic accepts the Strategy of national debt management of the Kyrgyz Republic for 2012-2014 (further - Strategy).

Strategy represents the mid-term plan of the Government of the Kyrgyz Republic on national debt management aimed at forming of the structure of public debt assuming optimum combination of costs and risks.

2. Purposes and tasks of national debt management of the Kyrgyz Republic

1. Purposes of national debt management of the Kyrgyz Republic

Main objectives of national debt management of the Kyrgyz Republic are:

- ensuring requirements of the Government of the Kyrgyz Republic for financing taking into account forming of structure of public debt of the Kyrgyz Republic with optimized combination of costs and risks for the purpose of maintenance of stability of public debt in the medium-term and long-term period;

- further market development of government securities of the Kyrgyz Republic.

2. Tasks of national debt management of the Kyrgyz Republic

The main and permanent institutional objective in the field of national debt management is ensuring de facto strict coordination of any decisions concerning the state borrowings with the purposes and tasks of the budget policy and also providing key role of the Ministry of Finance of the Kyrgyz Republic as single agent of the Government of the Kyrgyz Republic, in decision making process concerning national debt management.

New external borrowings will be attracted only on the most priority programs and projects which will promote economic growth and reducing poverty. Attraction and guaranteeing new state external borrowings will be performed only in case of respect for the minimum level of lgotnost of loans (grant element) in 35 percent.

Servicing of public debt of the Kyrgyz Republic will be carried out timely and in full.

The government of the Kyrgyz Republic will continue actions for decrease in level of external debt of the Kyrgyz Republic by negotiation with the countries creditors in bilateral format on consideration of question of provision of debt restructuring of the Kyrgyz Republic, carrying out swap transactions (exchange of debt for assets, development, etc.), and also its write-off or transformation to grant.

3. Strategy scope

This Strategy regulates questions of management of debt of the Government of the Kyrgyz Republic, and also the debt guaranteed by the Government of the Kyrgyz Republic. The debt of National Bank of the Kyrgyz Republic, and also debt of municipal authorities of the Kyrgyz Republic do not fall within the scope of scope of this Strategy.

4. Current status of public debt of the Kyrgyz Republic

For the end of 2011 the public debt of the Kyrgyz Republic constituted 3, 080 billion US dollars from which the internal debt constitutes 0, 277 billion US dollars (12, 875 billion som) or 9,0 of % and external debt constitutes 2, 803 billion US dollars or 91,0 of %.

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