NRB amends Unified Directive-2076 to mitigate forex reserve risk

KATHMANDU: Nepal Rastra Bank (NRB) has made an amendment to the Unified Directive- 2076 related to the trading of foreign currency.

The amendment was driven by the depletion of foreign exchange in recent months. The gross foreign exchange reserve decreased by 5.7 per cent to Rs. 1319.31 billion in mid-October 2021 from Rs. 1399.02 billion in mid-July 2021, according to the quarterly review published by NRB recently.

The current monetary policy targets to maintain a balance of foreign exchange reserve sufficient for importing goods and services for at least seven months

Meanwhile, the quarterly review showed that foreign exchange reserve has been continuously declining and now it has shrunk to imports for the next 7.8 months.

To mitigate the external sector shock, the NRB has simplified the deposit collection process from the Non-Residential Nepali and from the foreign institutions where Nepalis work.

The current limit of 30 per cent of the paid-up capital in the non-deliverable forward trade has been limited to 15 per cent.

The requirement of cash margin has been made compulsory for the LC (letter of credit) for the import of goods.

The current limit of a hundred thousand US dollars in the document against payment/document against acceptance has been reduced to 50 thousand dollars.

The provision has been made to allow the exchange of UD dollars up to $ 35 thousand for the import of silver. Before this, there was no limit in the exchange of currency in silver import.

Fiscal Nepal |
Sunday December 5, 2021, 09:45:11 AM |

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