IMF: Nepal’s request for a four-month extension of its current Extended Credit Facility (ECF) arrangement has been granted by the International Monetary Fund, giving Kathmandu more time to finish the program’s next review.
The IMF said in a statement released in Washington that on December 1, its Executive Board approved “the Nepali authorities’ request for a four-month extension of the Extended Credit Facility (ECF) arrangement until May 11, 2026, to allow sufficient time for completing the seventh review of the ECF arrangement.”
The present 38-month ECF agreement was first authorized on January 12, 2022, “with access of SDR 282.42 million (180 percent of quota),” according to the Fund. On May 1, 2023, a prior extension of the program that ran until January 11, 2026, was granted along with a rescheduling of payments.
The IMF Executive Board recently made a decision “on a lapse-of-time basis,” which is a process that is used “when a proposal can be considered without convening formal discussions.”
The IMF’s main concessional financing tool for low-income nations is the ECF, which offers financial assistance in addition to promises of economic reform. In recent years, Nepal has made use of the facility to improve fiscal management, restore external buffers, and stabilize its economy after the epidemic.
One essential component of Nepal’s foreign funding has continued to be multilateral assistance. The Himalayan country is still dealing with the challenges of weaker global development, erratic remittances, and the need for ongoing capital investment at the time of the ECF extension.
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