## Nepal: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Nepal

_IMF Staff Country Reports, April 6, 2020_

## Source details

**Canonical URL:** [Nepal: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Nepal](https://www.imf.org/en/publications/cr/issues/2020/04/06/nepal-2019-article-iv-consultation-press-release-staff-report-and-statement-by-the-executive-49308)

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## Bibliographic details
- Published: April 6, 2020
- Series: IMF Staff Country Reports

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### Overview and context
- Publication date: April 6, 2020.
- Focus: Nepal’s near and medium-term challenges and policy priorities.
- Prepared before coronavirus disease 2019 became a global pandemic and resulted in unprecedented strains in global trade, commodity and financial markets.
- Recent years’ growth drivers cited: greater political stability, improved electricity supply, and reconstruction activity following the devastating earthquakes in 2015.

### Major findings and assessments
- Continued inclusive growth requires additional policies while safeguarding macroeconomic and financial stability.
- Fiscal policy should remain prudent, and the transition to fiscal federalism should be carefully managed.
- Macroprudential measures should remain in place to limit the build-up of financial sector risk.
- Recent reforms to boost foreign investment need a supportive implementation environment.
- Strengthening the implementation of monetary policy requires a well-functioning interest rate framework that reduces volatility in short-term interest rates.
- Less short-term interest rate volatility would support financial market development and improve policy signaling and transmission.
- The IMF staff emphasizes the need to introduce a standing deposit facility as a first step toward establishing a reliable implementation track record for the interest rate corridor.

### Policy recommendations (explicit)
- Maintain prudent fiscal policy during the transition to fiscal federalism.
- Preserve macroprudential measures to cap financial sector risk accumulation.
- Provide a supportive implementation environment for reforms aimed at boosting foreign investment.
- Introduce a standing deposit facility to begin building a reliable implementation track record for the interest rate corridor.
- Establish a well-functioning interest rate framework to reduce short-term interest rate volatility and improve monetary policy transmission.

### Subject areas and keywords (as listed)
- Subject: Credit, Economic and financial statistics, External debt, External sector statistics, Financial sector policy and analysis, Money, Public debt, Stress testing
- Keywords: central government deficit, CR, Credit, credit growth, current account, External sector statistics, financing transaction, GDP, Global, government, ISCR, liability positions vis-à-vis nonresident, private sector, r eal GDP growth, remittance, remittance inflow, remittances slowdown, South Asia, Stress testing

### Publication metadata and identifiers
- Pages: 77
- Volume: 2020
- Issue: 096
- Series: Country Report No. 2020/096
- Stock No: 1NPLEA2020001
- ISBN: 9781513539751
- ISSN: 1934-7685

*International Monetary Fund. Asia and Pacific Dept "Nepal: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Nepal", IMF Staff Country Reports 2020, 096 (2020).*

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_Source: https://www.imf.org/en/publications/cr/issues/2020/04/06/nepal-2019-article-iv-consultation-press-release-staff-report-and-statement-by-the-executive-49308_