KATHMANDU: The decline in foreign exchange reserves has continued despite the tightening of imports.
Nepal Rastra Bank (NRB) had made an arrangement of keeping a cash margin of 100 percent for opening letter of credit (LC) for importing certain goods considering the negative impact of high imports on the foreign exchange reserves of the country. However, the decline in foreign exchange reserves has not stopped despite such measures
According to the Current Macroeconomic and Financial Situation Report released by the Nepal Rastra Bank on Wednesday, the foreign exchange reserves declined by an additional USD 140 million in the first six months of the current fiscal year.
NRB said that the current foreign exchange will only support imports for 6.6 months.
From the first week of December, NRB had made provision for a 100 percent margin when opening an LC for the purpose of importing luxury items such as silver and vehicles. Since then, imports of such items have declined. However, the recent data of Nepal Rastra Bank has confirmed that the declining foreign exchange reserves have not come under control yet.
In the last six months alone, foreign exchange reserves have declined by about 16 percent.