According to the country’s central bank, Nepal Rastra Bank, foreign currency reserves fell by more than 16 per cent to 1.17tn Nepali rupees ($9.59bn) in the seven months to the middle of February.
[Representational Photo: iStock]
Nepal has restricted imports of non-essential goods, including cars, cosmetics and gold, after its foreign currency reserves dropped, BBC reported.
It comes as a fall in tourism spending and money sent home by Nepalis working abroad helped drive up the government debt.
Meanwhile, the governor of the country’s central bank was removed from his role last week.
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Nepal’s finance minister said he was “surprised” the issue was being compared with the crisis in Sri Lanka, BBC reported.
According to the country’s central bank, Nepal Rastra Bank, foreign currency reserves fell by more than 16 per cent to 1.17tn Nepali rupees ($9.59bn) in the seven months to the middle of February.
Over the same period, the amount of money sent to Nepal by people working abroad fell by almost 5 per cent.
Last week, the Nepal government removed central bank governor Maha Prasad Adhikari from his role, without giving a reason for the decision.
The government debt in Nepal has risen to more than 43 per cent of its gross domestic product, as officials increased spending to help cushion the economic impact of pandemic, Nepal’s finance ministry said on Monday, BBC reported.
The ministry also said the indicators of the country’s economic health were “normal”.
“However, due to some pressures in the external sector, some steps have already been taken to manage imports and increase foreign exchange reserves,” it said.
Earlier in the day, Nepal Finance Minister Janardan Sharma said the country’s debt was lower than other countries in the region and elsewhere.
Sharma told reporters: “I am surprised why people are comparing with Sri Lanka,” BBC reported.
Sri Lanka is facing its most serious economic crisis since Independence from the UK in 1948.
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