International Monetary Fund disbursing 7 billion loans to Nepal
Published On : 2 May, 2023 3:27 pm
The International Monetary Fund (IMF) is going to disburse a loan equal to 50 million 28 million US dollars (about seven billion rupees) after reviewing the program that has mobilized subsidized credit through the Extended Credit Facility (ECF) in Nepal.
According to the statement issued by the IMF on Monday, the Executive Committee (Executive Board) meeting decided to disburse the loan under the ESF. The Monetary Fund team visited Nepal from February 15th to 28th and reviewed the progress of the programs under the CFS. According to Mudra Fund, more loans are going to be issued to Nepal after the review of the first and second stages.
After the balance of payments worsened with the foreign exchange reserves decreasing, Nepal started the process of taking CFF loan assistance through the IMF. Last year, i.e. on January 12, 2022, the Executive Committee of the IMF decided to provide 395.9 million US dollars worth of CF to Nepal as Special Drawing Right (SDR).
Available under ESF facility from IMF
Nepal has borrowed up to 180 percent of the subsidized loan quota. The IMF disbursed USD 110 million worth of concessional loans in January last year.
The concessional loan of 50 million 28 million US dollars that is currently being disbursed is another installment under the same agreement. IMF has given such a concessional loan facility to Nepal as a 38-month financial assistance package so that Nepal can use it as budget financing. Earlier in May 2020, Nepal has taken a loan of 214 million US dollars as Rapid Credit Facility (RCF) through IMF.
During the review of the program that mobilized concessional loans through the IMF, the IMF mentioned that there is a contraction in the economic growth rate of Nepal and the effect of the policy measures taken for the management of the internal and external sectors is beginning to be seen in the economy. IFF has also stated that the tight monetary policy has helped in managing the external sector and the government’s steps taken from the half-yearly review of the budget are trying to address the challenges that may be seen in the economy in the future.