As Nepal continues to struggle with dwindling foreign exchange reserves, the South Asian country's government has taken the decision
As Nepal continues to struggle with dwindling foreign exchange reserves, the South Asian country’s government has taken the decision to extend its complete ban on the import of ten different types of products, till the end of August. The Xinhua news agency reported that the prohibition, which was initially enacted in late April, was supposed to last until mid-July, when the current fiscal year came to an end, however it has been extended by one month. The official notice says that the embargo is in place to protect the balance of payments and external financial position, in order to fend off any impending threats to the economy.
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According to a notice published in the Nepal Gazette on Sunday, until August 30 entry will be prohibited for mobile phones priced at more than $300 US and motorcycles with engines larger than 150 cc, as well as for alcoholic beverages, tobacco products, diamonds, colour television sets larger than 32 inches, jeeps, cars, and vans, dolls, playing cards, and snacks.
Talking to Xinhua, senior economist Keshav Acharya explained, “As there has been no improvement in foreign exchange reserves, the government currently has no other options but to impose a ban on the non-essential goods which had contributed to the outflow of foreign currencies.”
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He said that despite the impact of this ban on revenue, “we cannot let the country slip in the direction of Sri Lanka by allowing unrestricted import of goods.”
According to Nepal Rastra Bank, the country’s foreign exchange reserves declined by 19.6 per cent to 9.45 billion US dollars during the first 11 months of the 2021–22 fiscal year. In mid–July 2021, they stood at 11.75 billion US dollars.
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