Nepal has urged citizens living abroad to deposit money in domestic banks as part of efforts to preserve foreign exchange reserves. The country has sought the help of expatriates so that they do not have to face economic crisis like Sri Lanka.
On Saturday, Nepal’s finance minister Janardhan Sharma said the country’s economic system still had sufficient liquidity and there were no problems. Talking to British news agency Reuters, he denied that Nepal was facing an economic crisis despite rising commodity prices in the country.
In the wake of the coronavirus epidemic, prices of essential commodities have started rising in Nepal as the government seeks to turn the tourism sector, one of the main sources of revenue for the country, around. Nepal, on the China-India border, has banned the import of luxury goods to curb capital.
From mid-March to mid-July, foreign exchange reserves fell more than 18 percent to 9.8 billion. With this money, the country’s import expenses can be borne for six months.
Sharma said expatriate Nepalis would get 6 to 7 per cent interest on their savings in the bank. He said the country has not faced an economic crisis and the situation in Nepal cannot be compared to that in Sri Lanka.
The South Asian island nation of Sri Lanka is facing its first unprecedented economic crisis in decades. Anti-government protests have been going on in the country for the past few weeks due to rising prices of essential commodities and disruption in public life.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employees living abroad send remittances equivalent to about a quarter of Nepal’s total economy. From mid-July last year to mid-March this year, remittance inflows fell by almost 3 percent to 5.3 billion. But remittances increased by 5 per cent over the same period a year ago.
Nepal’s tourism industry is an important source of revenue. After the outbreak of the Corona epidemic in 2020, the tourism industry began to collapse. Although the tourism industry is slowly turning around, it has not yet returned to pre-epidemic conditions.
Sharma said that if 100,000 Nepalese living abroad save 10,000 US dollars in Nepal’s banks, it could help overcome the current liquidity crisis.
The minister said Nepal had decided to take US 759 million assistance from the United States and a soft loan of 150 million from the World Bank. He said the United States would provide a non-refundable grant to Nepal over the next five years.