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Afghanistan: IMF Reportedly Approves $129 Million Loan

Posted by Ram Kumar Shrestha on November 15, 2011

KABUL, Afghanistan — The Afghan government said Tuesday that the International Monetary Fund had decided to reinstate a credit program for the country – a move that will revive the flow of international aid that was suspended over the Kabul Bank crisis.

Afghanistan has been without IMF backing for more than a year. Some donor nations had already stopped authorizing payments to Afghanistan.

The IMF had suspended the credit program in 2010 after the Kabul Bank, then the largest private financial institution in Afghanistan, nearly collapsed because of mismanagement and hundreds of millions of dollars in questionable loans.

The restoration of credit now allows Afghanistan’s international partners to re-engage in the nation’s development agenda.

The Afghan Finance Ministry said the IMF had approved a three-year $129 million loan that will allow the government to undertake critical reforms in the banking and financial sector, further fiscal reforms in the customs and revenue departments and improve public financial management.

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

The ministry’s statement made no mention of the Kabul Bank, which has become a symbol of the country’s deep-rooted corruption. The case is being closely followed by Afghans and international donors because it is a barometer of government officials’ pledge to root out patronage, graft and show accountability to world financial institutions, such as the IMF.

Read the Article at HuffingtonPost

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