Indian currency reserve declining
Due to increased trade
deficit and decreasing
inflow of remittances, the
Indian Currency (IC) reserve
at the Nepal Rastra Bank (NRB)
is declining at a fast pace
for the last couple of
months.
As a result, the central
bank purchased IC worth a
whopping $90 million last
month from Reserve Bank of
India, and is preparing to
buy an additional IC worth
$100 million soon, said a
highly-placed NRB source.
Earlier, the central bank
used to purchase IC once a
year or so. According to
him, the total IC reserve in
the Nepali banking system is
estimated at one billion
Indian rupees only. “This is
probably the first time that NRB bought IC worth $90
million within 28 days. The
central bank had bought IC
equivalent to $50 million
for about an entire year
some two years back,” said
Ramjee Regmi, executive
director at NRB Foreign
Exchange Management
Department.
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