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Nepal seeks overseas nationals’ help to build up forex reserves amid economic woes -Breaking

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© Reuters. FILEPHOTO: After the Nepali foreign currency reserves fell in Kathmandu on April 12, 2022, government officials tighten imports of cars. REUTERS/Navesh Chitrakar/File PH

Gopal Sharma

KATHMANDU, Reuters – Nepal asks citizens who are not from Nepal to make deposits in their local banks. This is part of an effort to maintain foreign currency reserves and ensure sufficient liquidity for the financial system.

Despite the effects of soaring commodity price, he claimed that Nepal wasn’t facing an economic crisis. However, Reuters reported that he did not believe Nepal was in financial trouble.

Nepal, wedged between China and India, this month imposed curbs on luxury goods imports to rein in capital outflows. As of mid-March, the foreign currency reserves had fallen by more than 18% from mid-July to $9.6 trillion. That’s enough to cover six months of imports.

Sharma explained that by depositing savings in Nepal, foreign Nepalis will continue to “maintain a link and also benefit from 6-7% interest” offered to them by Nepali banks.

Sharma stated that the economy was not in crisis, and Nepal’s current situation cannot be compared to Sri Lanka. The South Asian country faces its most severe economic crisis for decades, and there are anti-government demonstrations.

Remittances from overseas workers in Nepal, which make up nearly half of the country’s GDP, decreased 3.0% to $5.3Billion, between mid July and March. That compares to a 5% rise over the same period one year ago.

While tourism is slowly recovering, it still remains well below its pre-COVID status.

Sharma suggested that 100,000 Nepali nationals could deposit $10,000 each into Nepali banks to ease the liquidity crisis in Nepal.

Sharma stated that Nepal also agreed to receive $659 million from the United States, and approximately $150 million from the World Bank in soft loans.

He said, “The (non-refundable grant) money that will be sent to the United States in five years”

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