Moscow, 15 August 2016. Eurasian Development Bank (EDB), as the Resources Manager of the Eurasian Fund for Stabilisation and Development (EFSD), and the Republic of Tajikistan signed a US $40 million financial credit agreement today. The credit will be provided to support economic reforms in the country in 2016-2017 in two equal tranches.
Tajikistan has complied with all conditions precedent for the credit as set forth by the EFSD Council’s resolution dated 8 December 2015. The first tranche amounting to US $20 million is planned to be extended before end-August. The signatories on the part of EDB and Tajikistan were Dmitry Pankin, Chairman of the Management Board, and Abdusalom Kurboniyon, Minister of Finance, respectively.
The worsened economic situation in the region in recent years has had a negative effect on national revenues and increased Tajikistan's debt burden. The significant reduction in money remittances has affected the foreign exchange market and fiscal revenues. In this context, the abandonment of multiple exchange rates in mid-February 2016, resulting from the efforts to eliminate distortions in the market exchange rate formation and de-dollarise the economy, has helped to stabilise the foreign exchange market. The mid-term expectations are that the optimisation of customs and tax preferences (by improving the transparency of information about respective rates and abandoning inefficient preferences) will help to support to the public budget significantly. This optimisation is the key condition for the provision of the second tranche of the credit, also totalling US $20 million. The date for checking compliance with the conditions of the second tranche will be determined during the Resources Manager's visit to Tajikistan scheduled for early September 2016.
Additional Information:
Eurasian Development Bank (EDB) is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth, and the expansion of mutual trade and other economic ties in its member states. EDB's charter capital totals US $7 billion. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation and the Republic of Tajikistan.
The Eurasian Fund for Stabilisation and Development (EFSD) amounting to US $8.513 billion was formed on 9 June 2009 by the governments of the six countries. The objectives of the EFSD are to assist its member countries in overcoming the consequences of the global financial crisis, ensure their economic and financial stability, and foster integration processes in the region. The EFSD member countries signed the Fund Management Agreement with EDB giving it the role of the EFSD Resources Manager.
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