Monday, 2nd March 2015

New Monetary Policy: Review of laws needed for a share in global financial market

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The need of amending the Foreign Exchange Regulation Act and the Act Prohibiting Making Investment in Foreign Countries has been felt in order to make the capital account in tune with the time in the context of the national economy integrating with the global financial market.

The Nepal Rastra Bank (NRB) stated this in the monetary policy made public on Friday. The central bank stated that this was necessitated by the need of participating in the global exchange market amid the growing challenges in managing the foreign exchange.

NRB Governor Dr Yubaraj Khatiwada said that a revision in the existing provisions was necessary to ease the supply of the raw materials needed by the gold and silver entrepreneurs.

He said arrangements would be made by which the commercial banks outside the Kathmandu Valley would also be able to buy and sell gold in the current fiscal year alone.

The new monetary policy has adopted the line of giving continuity to the policy of adding the goods based on the need of the list of importable goods from India on payment of convertible foreign currency.

The new monetary policy also provides for the banks and financial institutions to exchange up to 10,000 US Dollars annually for the Nepali nationals meeting the set criteria for the purpose of medical treatment in foreign countries.

The new policy has adopted provision of importing goods through the letter of credit (LC) from Rasuwagadhi Customs Office in the context of the extension of Nepal-China trading points, of late.

Facility of exchanging money as per the bill is managed if any tour packages were sold by any internal travel and tour companies themselves or in coordination with the foreign agencies.

Similarly, facility to pay up to 100,000 US dollar has been managed through bank with the recommendations of bodies concerned to Nepali companies that provide telecommunications in agreement with the foreign companies and take satellite service in rent or used the service.

The monetary policy allows sending money to other countries cutting Nepal's share on the basis of the amount if any international non-government organizations working in Nepal run programmes in the country and also in other countries.

Likewise, the monetary policy has made provisions by which Nepalis holding accounts in foreign currency will be allowed to make payment of 10,000 US dollars annually to purchase goods and services through their accounts.

The monetary policy has adopted the policy of diversifying the limit of investment studying the provisions of other SAARC countries.

The policy also mentions that banking transactions could be carried out from the commercial banks in different places of China in order to systematize the payments through the commercial banks for the import and export trade with China.

The monetary policy extended the limitation of 30,000 US Dollars to 35,000 US Dollars for the payment of goods imported through Draft and TT from third countries except India.