Afghan Finance Minister: IMF to Reinstate Credit Program

Posted November 15th, 2011 at 7:10 am (UTC-5)
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Afghan officials say the International Monetary Fund has reached a deal to restore a credit program for Afghanistan, over a year after the country lost millions of dollars in international funding due to the Kabul Bank scandal.

The Afghan Ministry of Finance said Tuesday that the IMF has approved a three-year, $129 million loan to support economic reforms.

The move could help facilitate the flow of tens of millions of dollars in foreign aid and development projects that could not be approved without an IMF seal of approval.

The IMF suspended the credit program in September 2010 after Kabul Bank, then the country’s largest financial institution, nearly collapsed because of mismanagement, cronyism and questionable lending.

Afghanistan’s Finance Ministry says it has agreed to undertake reforms in its banking and financial sector, and customs and revenue departments, as well as improve public financial management.

Earlier this month, the IMF said Afghan authorities had made “important progress” in managing the crisis at the bank, which had lost more than $900 million in funds.

The IMF is expected to formally announce the decision later Tuesday.