Nepal urges its overseas citizens to put cash in domestic banks to help nation’s finances

Finance Minister Janardan Sharma says Nepal wants to ensure financial system has enough liquidity and preserve foreign exchange reserves

He denies country facing economic crisis like Sri Lanka, says Nepalis abroad who deposit savings at home will benefit from 6-7 per cent interest

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A man walks in front of a money exchange venue in Kathmandu, Nepal. Photo: AP

Published: 9:39pm, 16 Apr 2022

Nepal is asking citizens living abroad to deposit funds in domestic banks as part of efforts to ensure the financial system has enough liquidity and to preserve foreign exchange reserves, finance minister Janardan Sharma said on Saturday.

He denied Nepal was facing an economic crisis despite the impact of soaring commodity prices as the tourist industry, a key source of revenue, struggles to recover after the Covid-19 pandemic.

Nepal, wedged between China and India, this month imposed curbs on luxury goods imports to rein in capital outflows. Foreign exchange reserves fell over 18 per cent to US$9.6 billion as of mid-March from mid-July.

A man sits outside a money exchange site in Nepal. Photo: Reuters

By depositing their savings in Nepal, overseas Nepalis would continue to “maintain their link as well as benefit from 6 to 7 per cent interest” offered by Nepali banks, Sharma said.

Sharma said the economy did not face a crisis and Nepal’s situation could not be compared with Sri Lanka. That South Asian country is facing its worst economic crisis in decades and anti-government protests.

In Nepal, remittances by overseas workers, which constitute nearly a quarter of the economy and are crucial for external payments, fell 3 per cent to US$5.3 billion between mid-July and mid-March, compared with a 5 per cent increase in the same period a year earlier.