IMF team meets Finance Minister Paudel

KATHMANDU: International Monetary Fund (IMF) staff team, led by Sarwat Jahan, paid a courtesy call on Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel. The team is in Nepal to review the Extended Credit Facility (ECF) provided by the IMF.

During the meeting at the Ministry of Finance in Singha Durbar, Minister Paudel noted signs of improvement in the country's economy in recent times. He expressed confidence that future activities would yield further positive results.

The government is prepared to address economic challenges through legal, policy-level measures, and dialogue, with special attention to improvement, he mentioned.

Finance Minister Paudel committed to implementing suggestions from the international community based on the country's national context and needs. He emphasised the importance of the IMF's fifth review programme for Nepal and urged the team to hold further discussions on economic improvement issues. The government is focusing on policy and structural reforms to resolve economic problems, he clarified.

According to the finance minister's private secretariat, Minister Paudel expressed his belief that policy reforms will play a crucial role in strengthening the economy in the long run. He appreciated the suggestions and support from international development partners in the reform programme, stating that they will be implemented as per the country's needs.

The IMF team is reviewing the impact of past reform programmes and preparing for future reforms. They are assessing the progress made through previous initiatives to ensure the country's economic development policies and strategic plans are timely.

In January 2022, an ECF of $371.6 million was taken due to the decline in foreign exchange reserves and the weakening balance of payments. At that time, the ECF was taken to reach 180% of the special drawing rights quota received through the IMF. Previous reviews by the IMF cited political instability, low implementation of capital expenditure, and banking risks as the main challenges.

The IMF also suggested strengthening the financial system and taking serious measures to prevent money laundering. It emphasised that fiscal discipline is essential to increasing capital expenditure for the long-term stability of the economy.

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