Liquidity Crisis: A Two-Way Solution Imports and Loan Forwarding for Imports are being discouraged by the Nepal Rastra Bank.


The Nepal Rastra Bank has given directives aimed at discouraging imports even more.

After the country’s balance of payments deficit surpassed Rs 1.5 Kharba, the central bank implemented a stringent import control.

Imports of sugar and chocolate, cloves, mineral water, alcohol and vinegar, cigarettes and tobacco products, perfumes, cosmetics, wooden goods and accessories, footwear, umbrellas and sticks, marble, cement, plaster, ceramics, gold, and silver now require a 100 percent cash margin. Similarly, when importing autos, a 50% cash margin is necessary (except for electric vehicles).

As a result, the importer will be to maintain a cash margin in order to import certain commodities, discouraging their import. When products worth more Rs 1 crore were to be imported previously, the debtor could only invest Rs 1,00,000 and finance the remainder with bank loans. Additionally, frequent and business consumers were not to invest this minimal amount.

will not have to issue TR loans or short-term loans while making the payment because the letter of credit must be opened with a 100 percent margin and the same margin deposit must be utilized when the importer must pay.

This will deter imports and credit growth, providing a two-way solution to the liquidity crisis.

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