KATHMANDU, Jan 30: Economists have asked the government to implement stern measures to check depleting foreign currency reserves amid worsening balance of payments (BoP).
In a meeting with the Finance Minister Janardan Sharma on Sunday, the experts suggested the government continue with existing restrictions on import until the country’s BoP returns to normal. Although the macroeconomic indicators have not gone worse as of now, the government needs to implement necessary measures to prevent the country’s economy from going further worse, according to the economists.
Solutions to the Crisis of Depleting Forex Reserves
Recently, the slowdown seen in the external sector has raised a serious concern at various fronts about the country’s economic health. According to a report published by Nepal Rastra Bank, the BoP remained at a deficit of 195.01 billion in the first five months of the current fiscal year.
Over the period, the trade deficit soared by 54.7 percent to Rs 735.49 billion while the remittance inflow has declined further. Due to massive drain out of the foreign currencies from the country, Nepal now has foreign currency reserves sufficient to import goods and services only for 6.8 months.
Economists Shankar Sharma, Bishwombhar Pyakurel, Min Bahadur Shrestha, Durgesh Man Singh, Hari Rokka and Ram Kumar Phuyal were among the participants in Sunday's meeting with Minister Sharma. The experts also pointed out the need to improve agricultural productivity, discourage bank’s credit to unproductive sectors and introduce structural reforms in various sectors to ensure the good health of the country’s economy.
