R. Sahay: Governments should ensure external stability

Today the IMF Assistant Director of the Middle East and Central Asia Department Ratna Sahay said during the observation review on «Regional economic perspectives: Caucasus and Central Asia» that under the economic crisis, governments take initiative measures and contribute to budget development.

«However hard they try to increase the budget they should take into consideration how it will affect their external debts. No matter how much one spends, one should be able to carry the debt or, there is another variant, one may be pacificatory. Generally, they lead right policies, but they shouldn't forget about the external effects,» R. Sahay said.

She said, during the observation they have viewed 4 priorities, which «must work.»

«First of all, governments should ensure the external stability, i.e. allow the currency rate to be more flexible not to be oppressed, external reserves should be quite high. Second, the index of non-performing loans should be overcome. Third, governments should lead a budget policy opposed to the cicle, so that the external debts don't increase. For this one should obtain loans from the international institutions or one can apply to donors for grants,» R. Sahay said. She mentioned readiness as the last and the most essential priority.

«In case the situation worsens, I don't say it should worsen, but if such a thing occurs, the government should be ready for this,» she said.