KATHMANDU: The International Monetary Fund (IMF) has decided to provide assistance equivalent to approximately USD 42.9 million to Nepal under the Extended Credit Facility (ECF) program.

According to a press release issued by the IMF, despite the slowdown witnessed in economic activities, this assistance was approved because Nepal has achieved significant progress in the areas of structural reform.

The IMF noted that governance has improved through the modernization of the monetary operations framework, enhancement of financial sector supervision, completion of the loan portfolio review, improvements in the fiscal framework and transparency, strengthening of the public investment management and anti-money laundering frameworks, legal reforms, and increased accountability of public enterprises.

According to the details released after the IMF Executive Board meeting concluded on June 5, Nepal has made remarkable progress in economic reforms under the said program.

The IMF projects Nepal’s economic growth to stand at 3% for the current fiscal year 2025/26.

The growth is estimated to be lower than expected due to disruptions caused by political demonstrations, a decline in agricultural production, a slowdown in private investment, and the impacts of the war in the West Asia.

With this latest disbursement, the total assistance received by Nepal under this facility reaches approximately USD 384.1 million.

The ECF program, implemented by the IMF Executive Board for Nepal, will remain in effect until July 11, 2026.

The 38-month ECF program for Nepal was originally approved on January 12, 2022.

Under this program, Nepal received access equivalent to 180% of its quota, amounting to USD 282.42 million.

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