By A Staff Reporter
Kathmandu, May 26: Governor of Nepal Rastra Bank Maha Prasad Adhikari has said that Nepal’s economy was becoming more challenging as uncertainty has increased with the second wave of COVID-19.
He made this remark while addressing the 49th virtual meeting of the Board of Directors of the Asian Clearing Union (ACU), which was held on May 24, 2021.
“Trade, tourism, transport, manufacturing and construction sectors, which were affected by the previous wave of COVID-19, are gradually recovering. The second wave of COVID-19 has pushed the country's macro-economy back into uncertainty,” he said.
However, Governor Adhikari informed that the NRB has given high priority to the plan of adopting more effective policy measures for the revival of the COVID-19-hit economy.
He also briefed about various policy arrangements made by the NRB to lead the economy and financial sector affected by COVID-19 in a targeted direction.
According to a press statement of the NRB, Governor Adhikari informed that policy facilitation such as facilitation of liquidity, reduction of interest rate, facility of additional working capital loan, restructuring/rescheduling of loan, extension of loan repayment/interest payment period have been provided during the COVID-19 transition period.
The refinancing facility has been modified to facilitate loans for the revival of industries, businesses, small and medium enterprises affected by COVID-19 and necessary arrangements have been made to increase the refinancing facility up to five times by increasing the limit of refinancing fund, he said.
He also informed that a separate fund of Rs. 50 billion has been created with the assistance of the government of Nepal for the payment of workers’ wages in cottage, small and medium enterprises along with tourism affected by COVID-19.
On the occasion, Governor Adhikari stressed the need for moving ahead establishing cashless transactions by expanding the electronic payment system.
He said, “Encouraging transactions have been done through electronic means, including mobile banking, internet banking, QR code, Connect IPS in the difficult situation of prohibition. We need to make it more comprehensive.”
He also presented the latest statistics of Nepal's macroeconomic and financial sector.
The virtual meeting was organised by the Reserve Bank of India (RBI).
During the meeting, the central bank affiliated to the union presented the details of the overall economic and financial situation of the respective countries as well as the policy measures adopted to minimise the impact of COVID-19, NRB said.
On the occasion, Armida Salsiah Alisjahbana, Under-Secretary-General of the United Nations Economic and Social Commission for Asia and the Pacific, suggested that there should be policy cooperation and coordination among the central banks affiliated to the Union to mobilise the economy affected by the COVID-19 pandemic.
Secretary General of the Asian Clearing Union Lida Borhan Azad presented a report on the work done by the Union in 2019.
On the occasion, an integrated report on the problems, challenges and future course of action of non-banking financial institutions of the member countries were presented.
The Reserve Bank of India (RBI) has assumed the chairmanship of the Asian Clearing Union from today along with the meeting of the 49th Board of Directors.
The RBI will chair the Union until the next meeting is held.
Meanwhile, today's meeting has also decided to hold the 50th meeting of the board of directors of the Union in January 2022.
Central banks of nine countries, including Nepal, Bangladesh, Bhutan, India, Iran, the Maldives, Myanmar, Pakistan and Sri Lanka are members of the Asian Clearing Union.
The ACU was established in December 1974 with the main objective of providing an effective mechanism for payment and settlement among the member countries on a multilateral basis.