IMF okays $49.7 million rapid credit facility for Nepal

KATHMANDU, Aug 2:

International Monetary Fund has approved a disbursement of US$ 49.7 million for Nepal under the 'Rapid Credit Facility (RCF)' for rehabilitation and reconstruction efforts in the aftermath of the recently devastating earthquakes.

The executive board of the IMF held last Friday approved the disbursement, which also represents 50 percent of Nepal's quota in the IMF.
RCF is the financing to a country by IMF to address the recipient country's underlying balance of payments difficulties and support policy objectives including macroeconomic stability and poverty reduction. The fund financed under this facility carries a zero interest rate, has a grace period of 5.5 years, and a final maturity of 10 years.

According to a statement issued by IMF, the financial support will be disbursed as direct budget support to the Ministry of Finance's account at the Nepal Rastra Bank (NRB). "This financial support will help the country address the urgent balance of payments and fiscal needs associated with the rehabilitation and reconstruction efforts in the aftermath of the powerful earthquake that occurred on April 25 causing widespread damage and devastation," read the statement of the IMF.

"Structural reforms will remain key to overcoming persistent challenges, with a view to accelerating the recovery and fostering a more durable growth," the statement quoted the IMF's Deputy Managing Director and Acting Chair Mitsuhiro Furusawa as saying following the Executive Board's discussion of Nepal.

"In this regard, greater emphasis is needed on reforms designed to enhance competitiveness and strengthen the business climate in key priority areas -- such as transportation and energy, education and training, and SME access to finance -- to help set the stage for the next phase of Nepal's growth and development," he added.

Source: Republica