Forex reserve of Nepal has been decreasing. Monetary policy 18/19 has a target of maintaining Forex reserve sufficient to cover 8 months of imports of goods and services. However according to first quarterly review of current monetary policy such reserve stands to cover 7.9 months of such imports.
Inspite of remittance growth, increasing volume of imports vis-a-vis dismay exports, deficit forex earning via tourism sector( Nepalese spending abroad amounts NPR 29 Arab and that earned by Tourism industry is NPR 15 Arab), etc have contributed for such state of economy.
Central bank, as such has decreased exchange limit to $1500 from $2000. This can be helpful for short term but in the long run government should attempt measures to address the widening trade deficit, introduce planned development measures for tourism industry, and other industries that will diversify Forex earning.
stateofeconomy current centralbank forex reserve stability concern
