Press Release No. 03/202

Press Release: IMF Approves Three-Year US$72 Million Poverty Reduction and Growth Facility Arrangement for Nepal

November 24, 2003

The Executive Board of the International Monetary Fund (IMF) finalized its earlier in-principle approval of a three-year SDR 49.9 million (about US$72 million) Poverty Reduction and Growth Facility (PRGF) arrangement for Nepal (see Press Release No. 03/194). This decision followed the World Bank Executive Board's review of Nepal's Poverty Reduction Strategy Paper (PRSP) on November 18, 2003. Nepal will now be able to draw an amount equivalent to SDR 7.13 million (about US$10 million) from the IMF.

The PRGF is the IMF's concessional facility for low-income countries. PRGF-supported programs are based on country-owned poverty reduction strategies adopted in a participatory process involving civil society and development partners, and articulated in a Poverty Reduction Strategy Paper. This is intended to ensure that each PRGF-supported program is consistent with a comprehensive framework for macroeconomic, structural, and social policies to foster growth and reduce poverty. PRGF loans carry an annual interest rate of 0.5 percent, and are repayable over 10 years with a 5 ½-year grace period on principal payments.