NRB urges RBI to purchase its US$ reserves for IC
KATHMANDU, SEP 02 -
Nepal Rastra Bank (NRB) has urged its Indian counterpart—the Reserve Bank of India (RBI)—to open its window for purchasing Nepal’s US dollar reserves in exchange of Indian currency.
Currently, the Nepali central bank sells its US dollars to Indian commercial banks to get IC. If RBI opens the window, NRB can sell its dollars to the Indian central bank in case it is unable to find better exchange rate in the Indian market. “If RBI’s rate is better than that of the market, we can get IC from RBI which will be beneficial for the country,” said a senior NRB official.
NRB had proposed the Indian central bank formally in this regard a month ago when Nepali officials visited the Indian central bank. “We also proposed the same during RBI governor D Subbarao’s recent Nepal visit,” said the official.
Nepal has increasingly been purchasing IC in recent years due to huge trade deficit with India. As of the first 11 months of last fiscal year, Nepal’s trade deficit with India stands at Rs 200.87 billion, up by 26.2 percent compared to the same period in the previous year.
Not only has the trade deficit, Nepal’s trade dependence on India also risen to 66.9 percent as of the first 11 months of 2010-11 compared to 56 percent a year ago.
According to officials, NRB usually purchases IC twice a month by selling $20 million each time. “Lately, we are purchasing IC three to four times a month,” the official said. That’s why Nepal’s IC reserve has also increased to IRs 31 billion as of Aug 13 from the usual reserve of Rs 20-25 billion, according to officials.
As of the first 11 months of the last fiscal year, NRB purchased IC worth IRs 111.31 billion by selling $2.46 billion. The central bank had purchased IRs 102.09 billion by selling $2.19 billion in the same period a year ago.
Source: Kantipur
Nepal Rastra Bank (NRB) has urged its Indian counterpart—the Reserve Bank of India (RBI)—to open its window for purchasing Nepal’s US dollar reserves in exchange of Indian currency.
Currently, the Nepali central bank sells its US dollars to Indian commercial banks to get IC. If RBI opens the window, NRB can sell its dollars to the Indian central bank in case it is unable to find better exchange rate in the Indian market. “If RBI’s rate is better than that of the market, we can get IC from RBI which will be beneficial for the country,” said a senior NRB official.
NRB had proposed the Indian central bank formally in this regard a month ago when Nepali officials visited the Indian central bank. “We also proposed the same during RBI governor D Subbarao’s recent Nepal visit,” said the official.
Nepal has increasingly been purchasing IC in recent years due to huge trade deficit with India. As of the first 11 months of last fiscal year, Nepal’s trade deficit with India stands at Rs 200.87 billion, up by 26.2 percent compared to the same period in the previous year.
Not only has the trade deficit, Nepal’s trade dependence on India also risen to 66.9 percent as of the first 11 months of 2010-11 compared to 56 percent a year ago.
According to officials, NRB usually purchases IC twice a month by selling $20 million each time. “Lately, we are purchasing IC three to four times a month,” the official said. That’s why Nepal’s IC reserve has also increased to IRs 31 billion as of Aug 13 from the usual reserve of Rs 20-25 billion, according to officials.
As of the first 11 months of the last fiscal year, NRB purchased IC worth IRs 111.31 billion by selling $2.46 billion. The central bank had purchased IRs 102.09 billion by selling $2.19 billion in the same period a year ago.
Source: Kantipur
