IMF Approves $42.7 Million for Nepal Under Sixth ECF Review

Kathmandu — The International Monetary Fund (IMF) has approved a disbursement of $42.7 million (approximately Rs 5.84 billion) to Nepal under the sixth review of the Extended Credit Facility (ECF), signaling continued confidence in the country’s economic reform efforts.

A team led by IMF Mission Chief Sarwat Jahan concluded a two-week visit to Kathmandu on June 10. During the visit, the IMF delegation held extensive discussions with Nepali authorities on policy and reform measures. The mission concluded with a staff-level agreement outlining the way forward for completing the sixth ECF review.

The agreement, however, remains subject to approval by the IMF’s Executive Board. Once approved, the total IMF support to Nepal under the ECF arrangement will reach approximately $331.8 million.

Nepal entered into the ECF arrangement in 2022 to stabilize its economy after facing a sharp decline in foreign exchange reserves and a weakened balance of payments. The total program, worth $395.9 million—equivalent to 180 percent of Nepal’s quota under the IMF’s Special Drawing Rights (SDR)—is being disbursed in installments over four years.

The previous (fifth) installment, amounting to $41.8 million (around Rs 5.81 billion), was released following a successful review last year.

The IMF has also reiterated the importance of regulatory reforms in key areas such as anti-money laundering and counter-financing of terrorism (AML/CFT). This follows Nepal’s inclusion on the Financial Action Task Force (FATF) grey list. The Fund urged the Nepali authorities to stay vigilant and intensify efforts to strengthen financial governance and oversight.