First Business News Portal in English from Nepal
KATHMANXU: The government is preparing to implement the new system by hedging only the foreign investment entering Nepal in five different foreign currency. The government is preparing to implement such provision by amending the Hedging Guideline 2075.
The draft amendment to the Hedging Guideline, prepared by the Ministry of Finance, states that hedging can be done in currencies falling within the Special Drawing Right (SDR) as defined and maintained by the International Monetary Fund (IMF). The IMF has included only US dollars, Euros, Chinese Yuan, Japanese Yen and British Pound in the SDR.
The Ministry of Finance is preparing to send the proposal to amend the Hedging Guideline to the Office of the Council of Ministers soon. If the provision in the draft is approved by the Council of Ministers, foreign investment coming in foreign currency outside SDR will not be hedged.
A hedge is an investment that is made with the intention of reducing the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting or opposite position in a related security.
Your email address will not be published. Required fields are marked *
Save my name, email, and website in this browser for the next time I comment.
© Copyright 2020. FiscalNepal.com. Website Design and Developed by Genesis Web Technology