IMF Approves $42.9 Million Aid for Nepal

Kathmandu. The International Monetary Fund (IMF) has decided to provide aid equivalent to approximately 42.9 million US dollars to Nepal under its Extended Credit Facility (ECF) program.

According to the IMF, the aid has been provided because Nepal has achieved significant progress in structural reform areas due to the slowdown in economic activities, as stated in a press release issued by the IMF.

Modernization of the monetary operating system, improvement in financial sector supervision, completion of loan portfolio review, improvement in financial framework and transparency, strengthening of structures related to public investment management and money laundering control, legal reforms, and increasing the accountability of public institutions have also led to improvements in governance.

According to the details released by the IMF Executive Board after its meeting on June 5, Nepal has achieved remarkable progress in economic reform areas under the said program.

The IMF has projected Nepal's economic growth to be three percent in the current fiscal year 2025/26. Low growth is estimated due to obstacles created by political performance, decline in agricultural production, slowdown in private investment, and the impact of the Middle East war.

The total aid Nepal will receive has reached approximately 384.1 million US dollars. Earlier, the Extended Credit Facility (ECF) program implemented for Nepal by the IMF Executive Board will remain in effect until July 11, 2026.

The 38-month ECF program for Nepal was approved on January 12, 2022. Under this program, Nepal had accessed 180 percent of its quota of 282.42 million US dollars.

Nepal has committed to maintaining financial stability, strengthening foreign exchange reserves, improving public finance management, and advancing economic reform programs through the ECF program with the IMF.