NRB signals to tighten silver import

Kathmandu (Rashtriya Samachar Samiti): Nepal Rastra Bank (NRB) has signaled to halt increasing silver imports.

The central bank today reviewed the monetary policy for the current fiscal year and indicated that it will tighten silver imports.

NRB has stated that provision has been made to provide an exchange facility for importing silver only up to the maximum exchange facility of the amount provided for import through draft / TT.

Similarly, considering the current state of foreign exchange reserves, it is mentioned in the review of the monetary policy that it is mandatory to keep cash margin while opening the import letter of credit for the specified goods.

The impact of the covid-19 epidemic has been gradually diminishing and the availability of vaccines has been increasing, which has had an impact on the market.

Explaining that the number of people going for foreign employment and the arrival of foreign tourists has also started, the central bank said that monetary and financial policy facilitation has been maintained with the commencement of electricity export. From these facts, it is clear that economic recovery is gaining momentum.

The central bank has said that the demand for loans is increasing in the phase of economic recovery and a large part of such loans are being spent on import payments. As remittance inflows have not been able to grow as expected, pressure on external sector stability is likely to remain.

Expenditure on local elections in the current fiscal year will further expand the aggregate demand and put pressure on prices and imports.

The recent rise in the price of petroleum products in the international market has also estimated that Nepal’s inflation will increase.

According to a recent inflation expectations survey conducted by the bank, further pressure on inflation is expected in the coming days.

The review states that liquidity is under pressure as credit expansion is more than deposit mobilization of banks and financial institutions.

“As the economic recovery picks up, credit flows and imports have grown at a higher rate. Accordingly, the monetary policy stance has been continued keeping in view the need to manage the growing credit demand, increase the scope of resource mobilization and prevent a shortage of resources in productive activities,’ the review mentioned.

The central bank has a policy of making monetary management effective keeping in view the recent pressure on the balance of payments and possible pressure on inflation.