News Digest: Economy and Development (October 28 – November 03, 2021)

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Money and Banking

Nepal Rastra Bank (NRB) on 31 October issued a notice invited applicants from Covid-19 affected business and enterprises for a refinance facility under which borrowers can get the facility at a maximum of 5 percent interest rate. Interested applicants can avail the refinance facility through commercial banks, development banks and finance companies. Out of the refinancing scheme, 70 percent is to be provided through banks and financial institutions (BFIs), 20 percent on a case-to-case basis and the remaining 10 percent through micro-financing institutions. Borrowers can apply for A, B and C class financial institutions till 05 December to avail the refinance facility according to the same notice.

The central bank (NRB) has suggested the government to control the national import of luxury goods and other extravagant items considering the bloated balance of payments (BoP) deficit and reducing foreign exchange reserves. The country’s imports had increased by 63.73 percent to Nrs. 478.52 billion (USD 4 billion) during the first quarter of the current fiscal year (FY) 2021/22 as compared to a value of Nrs. 65.05 billion (USD 543 million) during the last fiscal (FY) 2020/21. This has left the foreign exchange reserves in a critical zone; compelling the central bank to monitor the national imports.

A meeting of the Council of Ministers on 28 October has decided to give subsidy to paddy farmers for the loss they incurred from the recent unusual flooding. As per the decision, farmers involved in paddy farming from 10 kathha to three bigha of land would be provided with 30 percent in subsidy while farmers doing farming in more three bigha of plot would be given maximum of 20 percent of the loss.

Market and Trade

Federation of Handicraft Associations of Nepal (FHAN) has decided to organize the 18th Handicraft Trade Fair from 19 November to 21 November in Hotel Hyatt Regency in the capital city. The fair is expected to accelerate domestic and international trade of Nepali handicraft and goods alongside developing business ties between Nepali and foreign handicraft traders.

Tourism and Aviation

Department of Immigration reported that Nepal saw the highest post-Covid monthly arrivals in October with the number of tourist entering the country crossing the 100,000 mark. According to the data, India was the largest source of tourist traffic to Nepal, followed by the United States and the United Kingdom.

A cabinet meeting of Gandaki province has formed the Pokhara Regional International Airport Operations Facilitation Committee. The committee is expected to coordinate, facilitate and co-operate with the stakeholders to prepare the airport within the stipulated period of time. Similarly, the committee is also tasked with monitoring the progress of the physical construction alongside resolving any obstruction to the construction work.

Infrastructure

Pampha Bhusal, the Minister for Energy, Water Resources and Irrigation has laid emphasis on the use of domestically-produced electricity by reducing the consumption of imported fuel. The minister also urged people to increase their consumption of electricity for industry, transportation and household appliances alongside promoting the use of electric vehicles to reduce the impact of climate change.

Nepal telecom’s regulator has requested all telephone, cable TV and internet companies to sign an agreement with the Nepal Electricity Authority (NTA) for the use of its utility poles. Likewise, NTA has also asked service providers to self-declare the location, number and the type of the infrastructure, its duration of use and the particular poles that they have been using.

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