The International Monetary Fund has approved the payment of an installment of approximately 6.5 billion rupees to Nepal.
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Nepal has approved the final tranche of the Extended Credit Facility (ECF) facility it has received from the International Monetary Fund (IMF).
The IMF Executive Board has completed the seventh and final review of Nepal's Extended Credit Facility (ECF). With this, Nepal has been approved to disburse an tranche of approximately US$42.9 million (approximately Rs. 6.5 billion).
This is the final tranche that Nepal will receive under the ECF. Under this agreement, Nepal has received US$384.1 million (Rs. 55.7 billion at the current exchange rate) from the Fund.
The Fund has stated that Nepal has made significant progress in implementing reforms through this facility. The Fund claims that this has helped to maintain macroeconomic and financial stability, build a 'buffer' in economic activity to mitigate the impact of global shocks and domestic uncertainty.
With this, the Fund has estimated that Nepal's economic growth rate will improve in the coming days. ‘Growth is expected to improve in 2026/27, driven by a peaceful transfer of power following the February 21 election and a favorable policy mix,’ the IMF said in a statement. ‘However, risks remain due to global uncertainty and internal vulnerabilities.’
The IMF suggests that in the coming phase, it would be beneficial for Nepal to continue the pace of reforms and institutionalize the achievements made during the program period.
Even after the extended loan agreement ends, the IMF has stated that it will continue to provide ‘post-financing reviews, regular 12-month Article IV consultations, and technical assistance’ with Nepal.
Economic Activity Nepal is expected to grow by about 3 percent in 2025/26. This is due to disruptions related to protests/movements, weak agricultural production, a slowdown in private investment due to pre-election uncertainty, and the effects of the war in the Middle East. However, the IMF said that Nepal's economic growth rate is expected to improve in the coming years as the recent peaceful transfer of power to a single-majority government, a favorable policy outlook, and an expansionary fiscal policy for 2026/27 gradually improve private sector confidence.
