Kathmandu: The Nepali government has banned the import of betel nut, pea, peppercorn and dried date temporarily as the South Asian country is facing dwindling foreign exchange reserves amid surging imports.
The central bank confirmed the ban in a notice on Sunday evening, stating that it would not provide any foreign exchange facilities for the import of the goods as requested by the Department of Commerce Supplies and Consumer Protection.
“The commerce department wrote to us asking not to provide foreign exchange facilities for the imports of these goods as they are under the prohibited list for the imports,” Dev Kumar Dhakal, spokesperson for Nepal Rastra Bank, told Xinhua. “Based on this request, we issued a circular in the name of banks not to provide any foreign exchanges for the import of these items.”
The Nepali government banned the import of the goods in March 2020 to save foreign exchange reserves due to a potential loss of remittances amid the COVID-19 pandemic. Remittances are the largest source of foreign exchange earnings for Nepal.
In March this year, the government allowed the import of the goods till mid-July by setting limits on their quantities.
The central bank was alarmed to see depleting foreign exchange reserves as a result of fewer remittances and surging imports. In the first month of the current 2021-22 fiscal year starting in mid-July, Nepal’s foreign exchange reserves decreased to 11.42 billion US dollars from 11.75 billion dollars, as imports grew by 75.7 per cent to 150.73 billion Nepali rupees (1.26 billion dollars) during the period, according to the bank.
Imports grew by 75.86 per cent to 314.51 billion rupees (2.64 billion dollars) during the second month of the current fiscal year, the Department of Customs said.
Remittances have become vital for the country since tourism has been hit hard by the pandemic, but money sent from abroad has fallen by 17.5 per cent to 638.2 million dollars, said the central bank.
“The time has not come to be more alert about the foreign exchange situation and take certain control measures to stop the fast depletion of foreign exchange reserves,” said Dhakal.