Nepal extends ban on import of 10 types of goods to save forex

The Nepali government is extending a complete ban on the import of 10 types of products till the end of August, as the country still struggles against a dwindling foreign exchange reserve.

As per the notice published in Nepal Gazette on Sunday, mobile phones priced over 300 US dollars and motorcycles with an engine capacity of over 150 cc shall be barred entry till August 30, along with liquor, tobacco products, diamond, color TV sets larger than 32 inches, jeeps, cars and vans, dolls, playing cards and snacks.

The ban, first imposed in late April, should have run till mid-July, when the current fiscal year ended, xinhua news agency reported.

The government notice said the ban is enforced to safeguard the external financial position and balance of payments in order to forestall any imminent threat to the economy.

"As there has been no improvement in foreign exchange reserves, the government currently has no other options but to impose a ban on the non-essential goods which had contributed to the outflow of foreign currencies," Keshav Acharya, a senior economist, told Xinhua.

"Despite its impact on revenue, we cannot let the country slip in the direction of Sri Lanka by allowing unrestricted import of goods," he said.

As of the first 11 months of the 2021-22 fiscal year that ended on Saturday, Nepal's forex reserves had decreased 19.6 per cent to 9.45 billion US dollars from 11.75 billion dollars in mid-July 2021, according to Nepal Rastra Bank.

The central bank data also show that there had been a slight improvement in the inflow of remittances, the largest source of forex earnings for Nepal, during the same period.