A team of the International Monetary Fund (IMF) led by Sarwat Jahan is in Nepal to review the progress of the Extended Credit Facility (ECF) worth USD 371.6 million Nepal secured from the IMF in 2022 to address declining foreign exchange reserves and a weakening balance of payments.
The review focuses on assessing past reform initiatives and identifying areas for improvement in Nepal's economic development policies and strategic plans, the state-run national news agency RSS reported.
The team discussed Nepal's ongoing economic challenges and reform efforts with Finance Minister Bishnu Prasad Paudel during a meeting held at the Finance Ministry in Singha Durbar on Wednesday.
Finance Minister Paudel highlighted signs of economic recovery and reiterated the government’s commitment to structural and policy reforms to tackle persistent challenges, RSS added. He assured the IMF team that Nepal is prepared to implement international suggestions based on the country’s national context and needs. The minister reportedly urged the IMF team to engage in further discussions on strategies to strengthen Nepal’s economy.
According to the Finance Minister’s private secretariat, he emphasized the importance of fiscal discipline and long-term reforms, stating that these measures would play a crucial role in stabilizing the economy. Minister Paudel acknowledged the valuable support and suggestions from international development partners and assured their implementation as per Nepal’s priorities.
The IMF team, meanwhile, is reviewing the impact of past reforms and conducting preparatory work for future strategies, RSS added.
According to the news agency, previous IMF reviews identified challenges such as political instability, weak capital expenditure implementation, and banking sector risks. It also suggested enhancing fiscal discipline, increasing capital expenditure, and strengthening measures to prevent money laundering.
This fifth review of the ECF is expected to provide critical insights into Nepal’s economic trajectory and inform future reform priorities.
