NRB to bring $10 million to ease shortage of billsNepal Rastra Bank (NRB) has sent two officials to Singapore to bring $10 million in cash to replenish depleting stocks of dollar bills in the domestic market.
Nepal Rastra Bank (NRB) has sent two officials to Singapore to bring $10 million in cash to replenish depleting stocks of dollar bills in the domestic market.
Janak Bahadur Adhikari, executive director of NRB’s Banking Office, has been tasked to sign an agreement with CIMB Bank, Singapore to transport US dollar bills
to Nepal. “Adhikari may have already sealed the deal, but we have not been officially informed about it,” NRB Spokesperson Narayan Prasad Paudel told the Post.
The central bank’s management committee headed by Governor Chiranjibi Nepal had decided to send a team to Singapore last month.
“After this team returns in a day or two, we will send another group to Singapore—most probably after the
Tihar holidays—to handle
the shipment,” Paudel said. “We expect the consignment of $10 million in cash to arrive next month.”
NRB has contacted CIMB Bank to transport dollar bills to Nepal because the central bank has an account with it.
“Although we are transporting our own money, we still have to sign an agreement with the Singaporean bank because no bank supplies such large amounts of dollar bills,” Paudel said.
NRB may have to spend around $20,000 to $25,000 in freight and insurance costs to transport the cash. This means the cost of transportation will come to 0.2 to 0.25 cents per dollar, or Rs0.20 to 0.25. “If the bills are fresh, the freight and insurance charges will be higher,” said Paudel.
NRB had to resort to this measure because dollar bills haven’t entered its system for almost eight months. While the supply of cash has gone down, demand has been growing every day. Army personnel who take part in the United Nation’s peace operations abroad, officials working for foreign diplomatic agencies and multilateral agencies, students pursuing studies abroad, Nepali travellers and entrepreneurs, among others, mainly ask for US dollars in cash. NRB probably would not have to bring dollars from Singapore if those going abroad carried dollar-denominated electronic cards. But Nepalis prefer to take hard cash with them, hence the shortage, central bank officials said.
While Nepalis going abroad like to stuff their pockets with dollar bills, international travellers visiting Nepal usually come with electronic cards, leading to a reduced supply of cash in the country.
Also, the central bank is suspicious about the activities of money changers and businesses engaged in the travel trade, such as hotels and travel agencies, as “they have not been sending dollars to NRB”.
The central bank has enough stocks of dollar bills to cover three to five months of consumption. It expects the cash consignment from Singapore to be enough for another four to six months.