Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Chandra Prasad Dhakal, President of the Federation of Nepalese Chambers of Commerce and Industry, has stated that the private sector needs a stable policy environment to operate freely. During a meeting with the International Monetary Fund (IMF) mission, Dhakal urged the IMF to understand Nepal’s economy and social structure and provide policy advice accordingly.
“Nepal’s economic structure and characteristics are somewhat different,” he said, adding that delays in reforms would occur if policies were not tailored accordingly.
Dhakal also pointed out that Nepal’s banking system currently has high liquidity, and although interest rates have decreased, there is still low demand for investment from the private sector. He stated that the FNCCI has urged banks to provide flexibility in lending on their own terms, adding that excessive regulation could erode confidence in both the banking sector and private businesses.
Dhakal expressed confidence that the new generation of reforms announced by the government on the advice of the private sector could provide solutions.
Dhakal informed the mission that eight laws had been amended and a draft bilateral investment agreement had been prepared to increase investment during the recent investment summit. Similarly, he urged the IMF to assist in promoting Nepal as a foreign investment. Dhakal stated that even with high foreign exchange reserves and a positive balance of payments the country had not been able to attract foreign investment.
During the meeting, IMF Mission Chief DrSarwatJahan said that the IMF had come to assist Nepal. She also stated that the IMF has always been positive about the need to give importance to the private sector.
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