Asian development bank to lend $1 billion to Kazakhstan

21.08.2015 16:11
Asian development bank to lend $1 billion to Kazakhstan

YEREVAN, August 21. /ARKA/. The Asian Development Bank has approved a $1-billion loan for Kazakhstan, Prime reports referring to the information received from the bank.

Earlier, Kazakhstan's national currency tumbled after the country embarked on a new monetary policy letting the tenge freely float.

The word of the new policy triggered a 26% devaluation of tenge over 24 hours. The currency plummeted to 255.26 tenge per one dollar. On Friday, the dollar weakened a little – by 2.79 tenge.

Kazakhstan President Nursultan Nazarbayev said there was no option but to let the currency freely float. He said this policy would make it possible to restore the Kazakh economy's competitiveness and to preserve reserves.

The loan will give Kazakhstan “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 at the bank’s central and West Asia department, said in a statement. “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 FINANCIAL reports that 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, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members–48 from the region. In 2014, ADB assistance totaled $22.9 billion, including cofinancing of $9.2 billion. --0--

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