NFRKNational Fund of the Republic of Kazakhstan
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The fiscal rule includes medium-term targets for the non-oil deficit (expected to tighten to 6% by 2025), and caps transfers from NFRK to the budget at KZT2 trillion after 2020, which would help support macroeconomic stability and replenish NFRK assets over the medium term.
Net sovereign foreign assets were 47.3 percent of GDP at the end of 2017, reflecting the assets of the NFRK and significant foreign exchange reserves covering almost 15 months of payments on the current account.
2011: The national fund of the Republic of Kazakhstan (NFRK): From accumulation to stress-test to global future.
The government has authorised drawings of USD9bn in 2015-17 from the NFRK for infrastructure projects and capitalised a Problem Loan Fund with USD2.7bn to address Kazakh banks' weak balance sheets.
Net sovereign foreign assets amounted to 47.3% of GDP at end-2017 (BBB median: 4.9%), reflecting NFRK assets and high FX reserves, which cover nearly 15 months of current account payments.
"We assume that the nearly 20 percent of GDP remaining in the NFRK will not be affected by the ongoing dispute with external investors.
In addition, fiscal pressures have led to a USD5.1 billion withdrawal from the NFRK -- although as of February such foreign assets stood at the substantial level of USD71.7 billion.
NFRK assets underpin a strong sovereign balance sheet.
The stimulus spending comes on top of the $9.2 billion guaranteed transfer from the NFRK to the budget each year (the maximum budget transfer is set by law at $8 billion, plus or minus 15%).
The government's fiscal policy response to less favourable external conditions will likely combine higher drawdowns from the NFRK for targeted economic support programmes, spending restraint and higher borrowings.
This includes tax revenues from oil companies, royalties, revenue from production sharing agreements (PSAs), privatization receipts, and capital income on NFRK assets.
Total foreign exchange reserves stood at US$46 billion at end 2008, including US$27 billion in the NFRK, the oil stabilisation fund, the use of which to fund rescue packages for the economy has been authorised by President Nazarbayev.