Washington, DC (BBN)– The International Monetary Fund (IMF) has approved a disbursement of US$49.7 million for Nepal under the Rapid Credit Facility (RCF).
The Executive Board of the IMF approved the credit facility on Friday aiming to 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.
“The Executive Board’s approval enables the disbursement of the full amount, which represents 50 per cent of Nepal’s quota in the IMF. At the request of the authorities, the money will be disbursed as direct budget support to the Ministry of Finance’s account at the central bank of Nepal,” the IMF said in a statement.
The RCF provides immediate financial assistance with limited conditionality to low-income countries with an urgent balance of payments need.
In this context, the economic policies of a member receiving RCF financing are expected to address the underlying balance of payments difficulties and support policy objectives including macroeconomic stability and poverty reduction.
Financing under the RCF carries a zero interest rate, has a grace period of 5.5 years, and a final maturity of 10 years. The Fund reviews the level of interest rates for all concessional facilities every two years.
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