Nepal is set to receive around NPR 6 billion in additional financial support after reaching a staff-level agreement with the International Monetary Fund on the seventh and final review of its Extended Credit Facility programme.
The agreement was concluded during an IMF mission to Kathmandu from February 6 to 20, led by Nepal Mission Chief Sarwat Jahan. Once the IMF Executive Board approves the review, Nepal will gain access to about USD 43.2 million. This will complete the four-year ECF programme, under which Nepal is eligible to receive a total of USD 395.9 million.
The IMF noted that Nepal has made satisfactory progress in implementing reforms despite challenging domestic conditions. Most performance targets due by mid-July 2025 were met, with only a minor shortfall related to child welfare grants.
Key reforms under the latest review include steps to improve customs compliance, completion of a loan portfolio review of banks, and alignment of asset classification rules with international banking standards. The IMF also stressed the importance of amending the Nepal Rastra Bank Act to strengthen the central bank’s autonomy and governance.
The Fund has projected Nepal’s economic growth at 3 to 3.5 per cent this fiscal year, below potential, citing policy uncertainty, weak private sector confidence and slow capital spending. It warned of rising financial sector risks, with non-performing loans reaching 5.4 per cent as of January 2026.
The IMF said restoring political stability, improving capital expenditure and strengthening financial oversight would be essential to support investment, boost domestic demand and sustain recovery in the coming years.