Nepal: 2010 Article IV Consultation and Request for Disbursement Under the Rapid Credit Facility: Staff Report; Staff Supplements; Public Information Notice on the Executive Board Discussion; Press Release on the Executive Board Discussion; and Statement by the Alternate Executive Director and Advisor for Nepal.
July 6, 2010
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After years of macroeconomic stability, the global crisis is having a substantial, albeit somewhat delayed, impact on Nepal’s economy and exposing its structural weaknesses. Although the Nepalese rupee appears modestly overvalued, maintaining the peg should remain a key near-term policy objective. Risks in the financial sector are coming to a head and need to be addressed urgently. The Nepal Rastra Bank (NRB)’s recent directives are welcome, but enforcement is crucial to their effectiveness. Bank licensing policy needs to be tightened, banking sector consolidation incentivized, and state-controlled bank reform tackled.
Subject: Balance of payments, Banking, Credit, Economic sectors, External debt, Financial sector, Money, Public debt, Remittances
Keywords: approval of retention, article, authority, balance of payments position, CR, Credit, Financial sector, fiscal policy stance, fund staff, Global, ISCR, liquidity crunch, Remittances, restriction, South Asia
Pages:
87
Volume:
2010
DOI:
Issue:
185
Series:
Country Report No. 2010/185
Stock No:
1NPLEA2010002
ISBN:
9781455202416
ISSN:
1934-7685
