IMF supports monetary policy

An International Monetary Fund (IMF) staff team, led by  Tidiane Kinda, conducted a staff visit to Kathmandu during July 20-26 to discuss recent macroeconomic developments and the implementation of the Fund-supported program. 

During the visit, the team discussed with Nepal government officials on the various aspects of Nepal’s current economic situation. At the end of the visit, Kinda said that following an economic slowdown last year, growth is projected to rebound in FY 2023/24, inflation is expected to recede, and the external position will continue to strengthen.

Cautious and data-driven monetary policy has set an appropriate stance to maintain price and external stability. Continued vigilance on banks’ asset quality and stepping up supervisory efforts remain key to preserving financial stability, he said.  Prudent execution of the 2023/24 budget is crucial to secure fiscal sustainability. Implementing measures envisaged in the 2023/24 budget would improve the efficiency of capital expenditure, he added. 

“The authorities’ ongoing efforts in meeting key commitments under the Fund-supported program, with the support of IMF’s technical assistance, are welcome.”  Performance under the program will be formally assessed in the context of the third review of the Extended Credit Facility, which is expected to be undertaken later this year, he added.