Law on state debt and borrowing was adopted in Kazakhstan

/Almaty office of REUTERS, 05.08.99/ - Law "On state and guaranteed by the state debt and borrowing" was adopted in Kazakhstan. According to this law the government has the full right to give state guaranties. The law, published in printed media today, formulates definitions of state debt and non-state borrowing, National Bank borrowings, and those of local executive bodies. Neither the National Bank nor local executive bodies have a right to give state guaranties on behalf of Kazakhstan. Size of a state external borrowing is limited by the republican budget; the National Bank's external debt limit should not exceed 50% of its gold and foreign exchange reserves, excluding those circumstances where the National Bank receives loans for certain programs from international financial organizations. Local executive body's limit should not be more than 10% of local budget's income for this year, and debt limit should not exceed 25% of local budget's income. The government borrowings are used to cover the deficit of the republican budget, and the National Bank borrowings are routed to support the payment balance and to replenishment of gold and foreign exchange reserves. Local borrowings are used to finance regional investment programs. State guaranties are provided to non-state borrowings only for projects included in the state investments program. Anyone who wishes to receive the state guaranty should provide with 15% of the funds for co-financing the project. According to the data from the government, the volume of the borrowings for 1999 equal to 67 bln. tenge. This includes World Bank loans, internal borrowings, and planned placement of eurobonds by Kazakhstan in the fall of this year for the amount of 250 mln. euros.