News Digest: Economy and Development (May 13–19)

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Nepal Rastra Bank unveils ‘Current Macroeconomic and Financial Situation’

According to Nepal Rastra Bank’s nine months report under ‘Current Macroeconomic and Financial Situation’, Nepal received remittances worth NPR 729.02 billion by the end of the third quarter of this year. As per the data collected during mid-July 2020 and mid-April 2021, remittances sent home has increased by 16.5 percent this year. Similarly, the report revealed that the current account deficit has remained at NPR 207.41 billion as compared to a deficit of NPR 126.09 billion in the previous year. Likewise, the year-on-year consumer price inflation has reduced to 3.10 percent as compared to 6.47 percent a year ago; with food and beverage inflation at 3.49 percent, and nonfood and service inflation at 2.79 percent, during the same review period.

Ministry of Finance allocates fund to fight the pandemic

Finance Ministry has allocated NPR 4 billion towards the prevention, treatment and control of the COVID-19 pandemic. Within this amount, 2 billion has been allotted to facilitate the functioning and procurement of oxygen plants and cylinders; and another 1 billion allotted to build High Dependency Centres.

NRB brings new directives

Nepal Rastra Bank has directed banks and financial institutions not to fine or collect extra charge on borrowers for delay in payment of loans and other borrowings. Similarly, NRB has also removed the ceiling that was previously imposed on the exchange of dollars on the import of oxygen cylinders and other medical essentials, to facilitate the fight against the pandemic.

Nepal Investment and Himalayan Bank to merge

Nepal Investment Bank and Himalayan Bank have signed a memorandum of understanding to merge, unifying them as Himalayan and Nepal Investment Bank. With a paid-up capital of NPR 16.26 billion and NPR 10.68 billion respectively, the combined paid-up capital after the merger will stand at NPR 26.14 billion, making it the bank with highest paid-up capital in the country.

Online transactions worth NPR 7.87 billion recorded

According to finding from NRB, online transactions worth more than NPR 7.87 billion were carried out during the first nine months of the current fiscal year, owing to the prohibitions in the traditional in-person transaction of goods.

Special flights to evacuate foreigners

With more than 7,000 foreigners stranded across the country, the government has allowed to operate ‘special flight services’, as a repatriation measure in order to evacuate foreign nationals who desire to return back to their homeland.

Kalimati fruits and vegetables market shut

Kalimati fruits and vegetables market has been shut until further notice in a bid to comply with social distancing measures. The move which also bans the entry of motorbikes, bicycles, and pushcarts inside the market premises has been criticized by consumer rights activities, as closing the market without proper management can lead to artificial price hikes in daily consumables.

Ripe tomatoes in a local farmer’s field near Katan village, Dhangadhi. Farmers are worried that the ban imposed for the prevention and control of corona will leave the tomatoes wasted. Photo: RSS

Dairy Industry bearing the brunt of lockdown

Consumption and demand for dairy products has reduced down to 1.3 million litres in the last two weeks. According to Nepal Dairy Association, around 60 percent (NPR 100 million) of available dairy has no immediate market or demand, leaving the farmers to dispose of their valuable produce.

Nepal Oil Corporation at loss

Nepal Oil Corporation (NOC) has revealed that the organization is operating at a loss of NPR 1.15 billion, even after repeatedly hiking prices of petroleum products. NOC which is currently paying NPR 37.90 per litre as revenue and VAT on diesel, and NPR 55.23 per litre as VAT on petrol to the government; has cited high tax rates as the reason for their losses.

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