Nepal has banned the import of luxury items to thwart the decline of the foreign exchange (forex) reserves of the country.
The biggest challenge at hand for the Nepalese government is the proper management of forex reserves, Nepal Rastra Bank (NRB) spokesperson Gunakar Bhatta said on April 7, reported myRepublica, an English-language National daily newspaper published by Nepal Republic Media in Kathmandu.
He added that the government is trying to prevent further problems at the earliest by ceasing the import of luxury items and remaining watchful.
"The import of luxury items has been stopped to prevent the decline in foreign exchange reserves due to the rising deficits and high imports," Bhatta said.
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He added that the NRB had to halt the import of some items to handle the external sector to prevent further problems to the country's economy.
Bhatta also stated that the NRB has not stopped the import of luxury items because of an economic crisis in Nepal. He mentioned that there was no need to panic as rumoured concerning the problems with the economy.
NRB has forex reserves to support sustain the import of goods and services for 6.7 months, Bhatta said, adding that the economy has shown positive signs lately.
Stating that several people have begun leaving the country for foreign employment, he noted that the flow of remittances may improve very soon.
Items banned for import
The import of bicycles, design vehicles, mopeds and necessary motor equipment, rice, textile products, machinery and spare parts, gold, paddy, electrical appliances, readymade garments, silver and thread has been banned.
Besides these items, a Letter of Credit (LC) will also not be open for the import of cement, toys, jars, sports goods and related items, stone decoration materials, silver, silver carved materials, chimney utensils, furniture and related items, and bottles until further notice.
The LC will also not be opened for the import of wood, hair creams and shampoos, perfumes, walking sticks, footwear and boots, make-up items, braces for teeth, charcoal and furniture, umbrellas, feathers, and weaving clothes.
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The imports of several items comprising plants, chillies, fish, vegetables and nuts, dairy products, betel nuts, chickpeas, natural honey and eggs, bananas and chips, meat, optical, medical and surgical equipment has also been banned.
Meanwhile, amid fears of Nepal's economy facing a crisis situation like that of Sri Lanka, Nepal's Finance Minister Janardhan Sharma said the country's economy will not nosedive like that of Sri Lanka.
Addressing the 'National Conference on Economics and Finance' organised by Nepal Rastra Bank (NRB) on April 8, Minister Sharma refuted rumours that the country's economy is on the brink of crashing like that of Sri Lanka.
He added that Nepal's economy is comparatively better off than that of Sri Lanka in terms of the production and revenue system and the country is not saddled with a massive foreign debt burden.