Chapter

KYRGYZ REPUBLIC

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
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Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: March 29, 1995.
Exchange Arrangement
CurrencyThe currency of the Kyrgyz Republic is the Kyrgyz som.
Exchange rate structureUnitary.
Classification
Managed floating with no pre-announced path for the exchange rateThe official exchange rate of the som against the dollar is defined as the average-weighted exchange rate of interbank foreign exchange transactions for the week. The National Bank of the Kyrgyz Republic (NBKR) participates and intervenes in the interbank market as necessary.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsThere are no prescription of currency requirements, and settlements may be made in any currency.
Payment arrangements
Bilateral payment arrangements
OperativeThere are agreements or settlement procedures with countries of the FSU.
Regional arrangementsThere are agreements with the Interstate Bank and the Central Asian Bank for Cooperation and Development.
Administration of controlThe NBKR has responsibility for managing its gold and foreign exchange reserves. The som is fully convertible for current payments and transfers with no restrictions on buying, selling, or holding foreign currencies. The NBKR is also responsible for issuing foreign exchange licenses to commercial banks and to foreign exchange bureaus.
International security restrictionsNo.
Payment arrearsIn 2000, arrears emerged in relation to India, Pakistan, Russia, and Turkey.
OfficialYes.
Controls on trade in gold (coins and/or bullion)All gold produced is sold at market prices. The government and the NBKR have priority in purchasing and also a right to participate as sellers. If the government and the NBKR do not exercise that right, the gold is sold either in the domestic market or abroad.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadThese accounts are permitted, but, according to the Law on Operations in Foreign Exchange, the NBKR should be informed about such accounts.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresExcise taxes apply to alcoholic goods, tobacco products, jewelry made of precious stones and metals, crystal products, clothing made from fur and skins, gas-operated arms and firearms, petroleum products, coffee, cocoa, and rugs.
Positive listThe list applies to all products.
Negative listImports of encryption equipment, armaments, military equipment and uniforms, explosive materials, nuclear materials, precious stones and metals, narcotics and poisons, pesticides, medicines and medicinal equipment, and official and civilian firearms may take place only with the authorization of the government.
Open general licensesOGLs are issued for the period of time required for the export and import operations, but for a maximum of one calendar year.
Licenses with quotasQuotas are applied on imports of ethyl alcohol.
Import taxes and/or tariffsThe tariff regime was changed on July 19, 1999, replacing the 10% duty on all imports with tariff bands ranging from zero to 50%. On January 1, 2000, the Customs Tariff for 2000 entered into force, whereby imports are subject to customs duties at the rates of zero, 10%, 17.5%, and 20%.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExports of wild and rare animals and plants, fish, raw medicinal materials, encryption equipment, armaments and military equipment, explosives, nuclear materials, precious stones and metals, narcotics and poisons, and antiques may take place only with the authorization of the government.
Without quotasYes.
Export taxesOn August 31, 1999, the authorities introduced temporary export duties of 100% on wheat, grain, and milk, and a customs duty ranging from $0.20-$0.30 per kilogram on a range of other agricultural commodities, including cotton, tobacco, wool, and other products. Most were subsequently eliminated, except for those on grain and flour.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instruments
On capital market securitiesControl is exercised by the National Securities Market Commission (NKRTsB) under the president of the Kyrgyz Republic, except for the following: debt securities of domestic state and local governments; other securities issued or guaranteed by the government of the Kyrgyz Republic, by the NBKR, or by local state authorities (excluding certain certificates); bills of exchange; any documented payment liabilities arising in the course of usual business activities and valid for a period not exceeding one year; and checks.
Shares or other securities of a participating nature
Purchase locally by nonresidentsThe issuer is obliged to provide the NKRTsB with information on the acquisition by any person of a share in its statutory capital exceeding 5% and/or 5% of its stock shares.
Sale or issue locally by nonresidentsThe same regulations apply as for purchases in the country by nonresidents.
Sale or issue abroad by residentsSecurities must be registered with the NKRTsB.
Bonds or other debt securitiesThe issuance and circulation of corporate bonds is regulated by the NKRTsB.
Purchase locally by nonresidentsThe same regulations apply as for shares or other securities of a participating nature.
Sale or issue locally by nonresidentsThe same regulations apply as for shares or other securities of a participating nature.
Sale or issue abroad by residentsSecurities must be registered with the NKRTsB.
On money market instrumentsThe main money market instrument consists of government treasury bills.
Purchase locally by nonresidentsThese transactions must be reported to the NBKR.
Sale or issue locally by nonresidentsSecurities must be registered with the NKRTsB.
Sale or issue abroad by residentsSecurities must be registered with the NKRTsB.
On collective investment securitiesSecurities invested in joint-stock investment funds and mutual funds are regulated; the operations of other funds are not presently regulated.
Sale or issue locally by nonresidentsThe same regulations apply as for shares or other securities of a participating nature.
Sale or issue abroad by residentsSecurities must be registered with the NKRTsB.
Controls on derivatives and other instrumentsThere is currently no market in these instruments; therefore, they are not regulated.
Controls on credit operationsThere are no controls on these transactions; however, all economic entities must report to statistical agencies concerning commercial (trade) credits received and issued.
Financial credits
To residents from nonresidentsThe MOF keeps track of state external debt. In the event that a guarantee of the government of the Kyrgyz Republic is provided, credits must be registered with the MOF. The government does not keep information on private borrowings abroad.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsPurchases are subject to approval by the Ministry of Justice.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadThese transactions must be reported to the NBKR.
Maintenance of accounts abroadThese transactions must be reported to the NBKR.
Lending to nonresidents (financial or commercial credits)These transactions must be reported to the NBKR.
Lending locally in foreign exchangeThese transactions must be reported to the NBKR.
Purchase of locally issued securities denominated in foreign exchangeLocally issued securities must be denominated in local currency. However, the use of foreign currency, or of payment documents in foreign currency, is permitted in certain instances and according to procedures established by legislation.
Investment regulations
Abroad by banksThese transactions must be reported to the NBKR.
In banks by nonresidentsThese transactions must be reported to the NBKR.
Open foreign exchange position limitsLimits are established by the NBKR.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investors
Limits (max.) on portfolio invested abroadInvestment funds are not permitted to invest, locally or abroad, more than 10% of their total assets in the securities of a single issuer, or to hold more than 25% of the common stock of an issuer.
Other controls imposed by securities lawsNo.
Changes During 1999
Imports and import paymentsJuly 19. The 10% uniform duty was replaced with tariff bands ranging from zero to 50%.
Exports and export proceedsAugust 31. The authorities introduced temporary export duties of 100% on a range of agricultural commodities, including cotton, grain, and flour. Most were subsequently eliminated, except for those on grain and flour.
Changes During 2000
Imports and import paymentsJanuary 1. The Customs Tariff for 2000 entered into force, whereby imports are subject to customs duties at the rates of zero, 10%, 17.5%, and 20%.

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