Nepal Likely to Join IMF Program in 2011

KATHMANDU- Nepal could enter a program of the International Monetary Fund(IMF), if the new government did not opine otherwise, from 2011 for three years to avoid possible adversities of balance of payment deficit and maintain financial instability.

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According to Friday's Republica daily report, officials following the negotiations between the government and IMF to join Extended Credit Facility (ECF) said talks have moved on in positive direction and decision on it will be taken as soon as the two sides agree on the terms of reforms and financial discipline to be followed.

"We are in close talks with the government of Nepal. If everything went well, the country will have the program from 2011 for the next three years," the IMF's new mission chief for Nepal John Nelmes too told the daily.

If approved, the IMF, under the program, will maintain a close surveillance of country's financial discipline and support it to uphold financial stability.

This will mainly enable Nepal enjoy financial and technical assistance to expedite reforms, fight economic problems and boost donors' and international investors' confidence to extend budgetary support and investment.

The government and the IMF had begun dialogues on entering ECF- the newly designed soft loans facility- after the government in the last fiscal year placed formal expression of interest to join the program.

Top officials of Ministry of Finance and the governor of Nepal Rastra Bank, the central bank of the country, had met with the senior officials of the IMF to discuss issues to this connection last week, on the sideline of the annual meetings of the IMF and the World Bank.

So far the IMF has expressed satisfaction over reforms Nepal did on public financial management.