“We are on our way to Sri Lanka,” said the NRB governor

KATHMANDU: APRIL. 8 – The Governor of Nepal Rastra Bank, Maha Prasad Adhikari, has stated that Nepal’s economy is following on the path of Sri Lanka.

Governor Adhikari stated at an economic and finance conference organized by the National Bank of Nepal that if imports to Nepal did not decrease immediately, the economy would be plunged into a serious crisis, and an economic crisis similar to the one in Sri Lanka could ensue.

“Imports are rising, and if the foreign exchange earnings are not commensurate with that, we could go the way of Sri Lanka,” he said.

He stated that the economy has been in a state of crisis since the start of the current fiscal year due to declining remittances, high imports, a widening balance of payments deficit, and a lack of liquidity in banks and financial institutions.

“The NRB, in collaboration with the government, has arranged cash margins to discourage higher imports, thereby increasing the risk burden on loans,” he explained. ‘There is now an obligation to safeguard foreign exchange reserves.’

He stated that in the current situation, the rise in petroleum prices has put pressure on the external sector, and interest rates have also risen due to a lack of investment capital.

He stressed on the need to build a product-oriented economy by improving our consumer-oriented habits as they are helping to build a consumer-oriented economy. He said that cooperation of all parties is needed to increase investment in the productive sector and reduce imports.