Central Banking Technical Assistance to Countries in Transition

Statement of the National Bank of the Kyrgyz Republic

Susana Almuina, Ian McCarthy, Gabriel Sensenbrenner, and Justin Zulu
Published Date:
December 1995
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The world community is providing the banking sector of our Republic with substantial technical assistance in order to support the efforts of the National Bank of the Kyrgyz Republic to establish a market-based financial system. The IMF began providing the Republic with technical assistance in April 1992 and opened the Office of the Resident Representative in the Kyrgyz Republic in September of that same year.

Technical assistance coordinated by the IMF is provided in the following forms: consultation services in different areas of banking; training of specialists; and assistance in preparing technical and economic criteria for projects under development.

To ensure effective utilization of the technical assistance that is being provided, M. A. Sultanov. Deputy Chairman of the Board of the National Bank, has been appointed the Coordinator from the National Bank of the Kyrgyz Republic. At the present time the National Bank, in close contact with commercial banks and other interested organizations and departments in the Republic, is developing a database for the aforementioned types of technical assistance and is defining priority areas for training and criteria for the selection of candidates.

It should be pointed out that all the technical assistance to the National Bank that is coordinated by the IMF is provided free of charge.

Technical Assistance Provided to the National Bank of the Kyrgyz Republic

IMF specialists provide consultation services in the following areas:

  • Legislative framework: draft law on the National Bank, draft law on operations in foreign currency, and a package of draft regulations for National Bank operations.

  • National currency: analysis of the economic effects of introducing a national currency, technical aspects of printing the national currency, organizing the introduction of the national currency, procedure for inspecting banknotes and destroying them, and procedure for carrying out emission and cash payment operations.

  • Monetary policy: analysis of monetary policy, compilation of a consolidated National Bank balance sheet and classification of assets, the problem of overdrafts, analysis and forecasting of the National Bank’s balance sheet, and calculation of compound and simple interest rates.

  • The Republic’s balance of payments: its compilation and analysis.

  • Foreign exchange operations: reorganization of the administration of international relations and foreign exchange operations, principles for conducting foreign exchange operations and establishing correspondent relations, and management of National Bank reserves.

  • Securities: rules and procedures for holding auctions for the sale of treasury bills, management of government debt, and development of a secondary securities market.

  • Statistical reporting: structure and flow of information, and automation of the reporting system.

  • Payments system: reorganization of the payments system, a project for organization of a clearing house, and modernization of the equipment at National Bank computer centers.

  • Banking supervision: organization of the management of banking supervision and licensing, licensing of banks, banking supervision procedures, and external and internal auditing.

  • Accounting and reporting: creation of a new chart of accounts, procedure for carrying out cash payment operations, and recording of operations in foreign currency.

From 1992 to the present time, the National Bank has received eight IMF missions with participants representing cooperating central banks of the industrial countries. It must be noted that effective utilization of the IMF’s technical assistance program would be impossible without the capable and generous help of Harry Trines, IMF Resident Representative in the Kyrgyz Republic.

At present, two consultants—Tetsuji Tanaka (IMF consultant, Bank of Japan), Advisor to the Chairman of the Board, and Isaac Svartsman (U.S. Agency for International Development (U.S. AID)), Advisor on Banking Supervision—are providing ongoing consultation services at the National Bank of the Kyrgyz Republic. George Dreiky and Fedor Kushnirsky (U.S. AID) are also providing invaluable help to specialists of the accounting and reporting department.


Since April 1992, a great number of National Bank employees have undergone short-term training and have taken part in seminars on the following banking areas: macroeconomic management; the market economy and financial analysis; national debt; central bank functions and management; banking supervision; monetary instruments in the transition period; execution of monetary methods in the transition period; payments system; foreign exchange operations; accounting and reporting, and a new chart of accounts; securities; and other courses for improving skills.

Seminars have been held in the following organizations and donor countries: the Joint Vienna Institute; Bank of France; Bank of Japan; Bank of England; Bank of Pakistan; Bank of Switzerland; Bank of Turkey; and other organizations.

Of the training programs coordinated by the IMF for specialists in the Republic’s banking sector in 1994, the largest three are regional courses and seminars on macroeconomics and financial policy conducted by the IMF Institute; a banking supervision training program conducted by the U.S. AID; and a training program on the payments system and activities of commercial banks conducted by the Bank of Japan.

Preparing Technical and Economic Criteria for Projects Under Development

At present a long-term project for improving the payments system is being developed at the National Bank. Through the Japan International Cooperation Agency, the Government of Japan is providing technical assistance on this matter. The agreement for the project (Research to Improve the Payments System in the Kyrgyz Republic) was signed on August 3, 1993, and implementation began in January 1994.

The project’s aims are to formulate a strategy for developing the financial system for the period up to the year 2000; formulate a plan for improving the payments system on the basis of utilization of a computer network; and transfer technologies to participating Kyrgyz personnel through the organization of seminars in the Kyrgyz Republic and training in Japan.

This project is administered by a management commission made up of representatives of the National Bank, the General Directorate of the State Commission on Foreign Investments, the Ministry of Finance, and the Ministry of Communications of the Kyrgyz Republic. The dates for joint work in the Kyrgyz Republic in 1994 are January-March, mid-June to mid-August, and October.

The final report of the Japan International Cooperation Agency mission will be presented in mid-January 1995. After the final report is drafted and discussed, a formal request will be submitted to the Government of Japan for financing and implementation of the project.

In connection with the aforementioned, there is also a short-term project for organization of a clearing house on the basis of the modernization of the National Bank’s computer center. In the course of the implementation of this project, specialists of the European Bank for Reconstruction and Development are providing technical assistance to determine parameters for the needed computer equipment and software and to address purchasing and installation issues.

National Bank working groups have received and are receiving necessary guidance from IMF experts on both these projects.

In addition, a project is under way to create and put into daily practice National Bank central accounting for a new chart of accounts. Work on this project is being conducted with the direct participation of two specialists from the Bank of France. The joint work should be completed by the end of 1994.

We trust that the efforts of the National Bank, bolstered by the substantial and invaluable outside assistance coordinated by the IMF, will lead to the creation of a reliable, modern banking system in the very near future.

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