The IMF has agreed a new lending facility with the Kyrgyz Republic, following the expiry in June 2010 of the previous, 18-month programme under the exogenous shocks facility (ESF), which was introduced in response to the global financial crisis. Under the previous programme, only one of the planned three reviews was completed, owing to political turmoil. The IMF released a loan of US$33m under a rapid credit facility (RCF) in September 2010, and in late April 2011 reached preliminary agreement on an RCF credit amounting to US$108m. The IMF executive board is expected to reach a final decision on the RCF in June.

In a press release, the Fund stated that it had agreed with the government on the need to put the public finances on a sustainable footing over the medium term, despite the passage of an expansionary budget for 2011. Revenue-raising measures are to be based on simplifying the tax system, spreading the tax burden more evenly and limiting tax evasion. The Fund also called for spending restraint, despite the need to offset the economic shock on the population resulting from the decline in the economy in 2010. In particular, it called for wage restraint in the public sector. It also called for the maintenance of a tight monetary stance in order to contain inflationary expectations.