Amid growing demands for relaxation on restriction for online shopping of foreign goods, services and swelling forex reserve, NRB to allow foreign currency exchange up to a certain limit

KATHMANDU, Dec 6: Nepal Rastra Bank (NRB) is preparing to relax its restriction on foreign exchange restriction and allow people to pay for purchase of goods and services online on foreign currency to a certain limit.

Though the central bank has not disclosed the limit for the payment on foreign currency, a senior official at NRB told Republica that it could allow the online shopping and import of goods and services worth up to $500 per year.

The process and the limit as well as other details will be spelled out in a circular to bank and financial institutions (BFIs) from the central bank soon, according to the senior official.

Currently, Nepalis are not allowed to make direct payments on foreign currency for online purchase of foreign goods and services.

In its first quarterly review of the monetary policy for the current fiscal year 2020/21, NRB made the announcement to ease up its restrictive foreign currency rules to introduce a provision allowing people to purchase and import foreign goods and services online by paying on foreign currency.  

The new provision allowing people to make payments on foreign currency will not only make the payment of foreign currency legal but also make it easier for those who want to purchase foreign goods and services online.

This relaxation is expected to benefit those who want goods online from Amazon or Alibaba or Netflix subscription or students who want to take online classes or travelers who want to book hotels abroad or advertisers making advertisements on Facebook and other social media sites.   

Though the online purchase of foreign goods and services was not allowed, many found the central bank’s restrictions on the foreign currency payment.

Many were relying on dollar-denominated cardholders or relatives and friends abroad to make even a small amount of foreign current payments. 

NRB officials say that the central bank decided to lift the restriction on foreign currency payment in the wake of growing complaints about the hassles on online retail purchase of foreign goods and services from Nepal.

According to the NRB data, Nepal’s gross foreign exchange reserves have increased to a record high of USD 12.55 billion.

 
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