Govt lifts ban on import of luxury items; NRB to continue with cash margin requirement

KATHMANDU: A meeting of the Council of Ministers on Tuesday evening decided to lift the ban on the import of luxury items including vehicles, mobile phones, liquors and motorcycles. The decision will come into effect from December 16, according to Minister for Industry, Commerce and Supplies, Dilendra Badu. "The cabinet meeting has decided to lift the ban on the import of luxury items which was in place since early May. A committee formed in coordination with Chief Secretary Shanker Das Bairagi had recommended lifting the ban on the import and the Cabinet meeting held on Tuesday evening decided to end the ban. Imports will open from December 16, 2022," Minister Badu said. The country came under massive pressure due to depleting foreign exchange reserves that had restricted the import of 10 different luxury items issuing a notice in the Nepal Gazette. In an initial announcement the Ministry of Industry, Commerce and Supplies announced a ban on the import of chips, liquors, cigarettes and tobacco products, diamonds, mobile phones, colour TV sets, automobiles, toys, and playing cards. The ban had not affected the import of raw materials for cigarettes and tobacco, mobile phones priced below $600, Colour Television sets below 32 inches, motorcycles below 250cc and ambulances. It has to be noted that the central bank has made it mandatory for importers to deposit cash margin from 50% to cent per cent on selected items. International Monetary Fund (IMF) and businesspersons in Nepal have been demanding NRB remove the cash margin deposit made mandatory to import luxury items. If the demand for luxury items goes up, Nepal’s foreign currency reserves needed to import essential items like medicines, oil products, and other items will run out in a short time, according to the Executive Director at Economic Research Department of NRB, Prakash Kumar Shrestha. The cash margin deposit will not be removed immediately, but after analysing the demands of imported luxury items, according to Shrestha. Meanwhile, gross foreign exchange reserves increased 2.5% to Rs1,246.22 billion in the first three months of the current fiscal year from Rs1,215.80, according to data released by NRB. In US dollar terms, the gross foreign exchange reserves decreased 0.6% to 9.48 billion from 9.54 billion in mid-July 2022. Of the total foreign exchange reserves, reserves held by NRB increased 4.3% to Rs1,101.60 billion from Rs1,056.39 billion in mid-July 2022. Reserves held by BFIs (except NRB) decreased 9.3% to Rs144.62 billion from Rs 159.41billion in mid-July 2022. The share of Indian currency in total reserves stood at 23.8% in mid-October 2022. READ ALSO:

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