IMF: Kazakh economy on the right path

ALMATY — A senior International Monetary Fund official has praised Kazakhstan, an early victim of the global credit crunch, for its handling of the crisis.

The oil-rich Central Asian nation has taken drastic measures to minimize the impact of the international economic crisis, including investing state funds in the country's top banks and loosening monetary policy.

"Over the past year, the IMF has consistently supported the actions of Kazakhstan's government in stabilizing the economy," IMF's Kazakhstan representative Tim Cullen said Wednesday.

Cullen singled out the government's efforts to recapitalize domestic lenders as a particularly positive development.

Kazakh banks were among the world's first to be hit by the worldwide liquidity crunch this year because of high reliance on foreign borrowing. Top banks have survived the crisis, but the government says lenders will need to pay back around $12 billion next year.

Samruk-Kazyna, a state-run national welfare fund, earlier this month agreed to pump $3.5 billion into the country's four top banks by taking stakes in the lenders.

"We believe that in current circumstances, this will strengthen the situation in Kazakhstan's banking sector at this stage and will prove very beneficial to the economy," Cullen said during talks with Prime Minister Karim Masimov. "Kazakhstan's approach indicates that the country is on the right track to emerging from this complicated situation."

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