Published On: January 22, 2023 03:00 PM NPT By: Republica | @RepublicaNepal
KATHMANDU, Jan 22: The decision to remove the mandatory cash margin on imports has been welcomed by industrialists and businessmen. After the pressure on foreign currency reserves, the government had arranged mandatory cash margins for imports since last year. The private sector had been opposing the provision for a cash margin of 50 to 100 percent while opening letters of credit (LCs) for imports.
The private sector has welcomed Nepal Rastra Bank (NRB)'s decision to remove all types of cash margins after significant improvement in the foreign exchange reserves. The NADA Automobiles Association of Nepal has published a statement and welcomed the decision to remove the provision of mandatory cash margin for the import of vehicles and various automobile items.
Similarly, the Nepal Chamber of Commerce (NCC) published a statement and said that removing the margin will help make the economy more sustainable. The chamber has also requested the authorities to maintain a limit of 40 percent of current capital loans for both large and small borrowers.
After the decrease in foreign exchange reserves, the government had arranged for a cash margin of 50 to 100 percent while opening LCs for the import of 1,600 items of 47 categories in November and December last year, and the businessmen had been demanding to reduce this.
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