Banks to be allowed to sell five more currenciesNepal Rastra Bank (NRB) is preparing to issue a directive permitting banks to freely trade another five currencies.
Nepal Rastra Bank (NRB) is preparing to issue a directive permitting banks to freely trade another five currencies. Banks will be allowed to sell the Swedish kroner, Danish kroner, Hong Kong dollar, Kuwaiti dinar and Bahrain dinar too.
Previously, they could only buy these currencies but not sell them.
“We are planning to issue a directive within the next three weeks,” said Basudev Adhikari, director of NRB. The facility is being made available as announced in the monetary policy for the current fiscal year 2015-16.
“The provision has been created to make life easier for the Nepali migrant population as international travel has increased substantially,” said Adhikari. In the past, returnee migrants remained in the country so there was no need to allow banks to sell diverse foreign currencies. “The dynamics have now changed, and we are liberalizing the foreign exchange regime,” said Adhikari.
In recent years, Nepali outbound has become a common phenomenon for different purposes, largely for foreign employment.
According to bankers, they cannot open nostro accounts in currencies whose selling rates have not been fixed. A nostro account is an account held by a bank in a foreign currency in another bank.
“Customers cannot open accounts in these currencies either,” said Rajan Amatya, deputy general manager of Nepal Investment Bank Limited (NIBL). He said that the new provision would simplify things for both banks and customers and business deals would become easier.
The provision for trading the US dollar, Euro, British pound, Swiss franc, Australian dollar, Canadian dollar, Singapore dollar and Japanese yen has existed for a long time. The Chinese yuan, Qatari rial, Thai baht, Saudi Arabian riyal, UAE dirham, Malaysian ringgit and South Korean won were allowed to be traded freely recently.