Nepal negotiating ECF with IMF

Nepal is negotiating with International Monetary Fund (IMF) to get Extended Credit Facility (ECF) for a long-term favourable balance of payment (BoP) situation that has been in deficit lately.
“As per ECF, IMF will provide loans equivalent to maximum of 300 per cent to 450 per cent of the allocated quota,” said Nar Bahadur Thapa, a director at the Nepal Rastra Bank (NRB), at an interaction organised by Society of Economic Journalists of Nepal (Sejon). He has recently returned after serving a two-year term at the IMF.
IMF provides financial assistance to its member countries on affordable terms to meet their BoP needs.
In the last fiscal year, Nepal suffered from a BoP deficit of around Rs 2.62 billion and this fiscal year too, BoP deficit has not been corrected.
Earlier this year, IMF -- after its Article IV mission -- had disbursed an amount equivalent to SDR 28.52 million for Nepal on June 19 to cope with the escalating BoP deficit under its Rapid Credit Facility (RCF) that provides immediate financial assistance with limited or no conditions to low income countries (LICs), facing an urgent BoP need.
However, ECF comes with a baggage of conditions.
In order to achieve economic stability, according to him, Nepal needs to implement macro prudential measures as micro prudential measures like BASEL II requirements is not enough to guarantee economic stability.
IMF board’s on December 15 approved Resolution of Quota and Reform doubling the quotas to approximately SDR 476.8 billion along with a major realignment of quota shares among members. According to the decision, Nepal’s allocated quota has also been increased to SDR 156.9 million from SDR 71.3 million. Each member country of the IMF is assigned a quota, based broadly on its relative position in the world economy. A member country’s quota determines its maximum financial commitment to the IMF and its voting power.