IMF concerned about economic situation of the country: Report

A high level delegation of the International Monetary Fund (IMF), has taken a very serious view of the status of the country's macro-economic stability, especially of its fiscal imbalance in recent times, report said.

With this fiscal imbalance, IMF is confused whether to continue its Poverty Reduction Growth Facility (PRGF). If Nepal could maintain fiscal discipline, PRGF may be continued as per IMF, The Himalayan Times daily quoted a source at the central bank after a three-member mission of IMF led by Sajnay Kalra from Washington DC, completed its 10-day visit to Nepal on Wednesday.

Currently only Rs 3.40 billion is in government's treasury, which is just enough to meet the salaries of civil servants for a month.

The forthcoming budget needs to take stock of PRGF extension, which is expiring as per earlier agreements with IMF in November this year.

Under the PRGF, Nepal has been getting loans from IMF to the tune of about seven billion rupees at below one percent interest rate for a three-year period. If that is not available, Nepal would be a loser at a time when Nepal is 'cash-strapped', said sources.

The IMF team has also suggested the government to expedite privatisation.

The Nepali government is currently seeking international financial support as budgetary support due to shortage of funds. It may be recalled that India has given a budgetary support of Rs 1.60 billion for five years. nepalnews.com pb June 22 06