NEPALI RUPEE SLUMPS AGAINST US DOLLAR

DOLLAR GAINS IN NEPALI MONEY MARKET

Kathmandu, 23 Sept. The price of the US dollar surged in the Nepali money market Friday as Nepal Rashtra Bank (NRB) fixed its exchange rate at Rs.78,91 per dollar.
The Nepali rupee lost Rs. 1.65 to the dollar in one day—the sharpest fall in 29 months.
The greenback gained with the fall on the of the price the Indian rupee; the Nepali rupee in pegged at NRs.1,60 to the Indian rupee while the currency is floated against convertible currencies.
The Nepali rupee was devalued by the central bank to maintain the fixed cross-currency exchange rate.
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NOC PAYS 100M INTEREST EVERY MONTH

Kathmandu, 23 Sept.: Nepal Oil Corporation (NOC) has been paying Rs 100 million as interest for its outstanding debt, according to NOC acting managing director Suresh Kumar Agrawal, The Himalayan Times reports..

Speaking at a programme organised by Nepal Petroleum Transporters’ Federation here in the capital today, he informed that the corporation had borrowed around Rs 17.5 billion from different government entities and banks.

The state oil monopoly has been charging consumers Re 0.97 on a litre of petrol, Re 0.81 on a litre of diesel, Re 0.70 on a litre of kerosene, Re 0.74 on a litre of Aviation Turbine Fuel (domestic), Re 0.63 on a litre of ATF (international) and Rs 14.18 on a cylinder of cooking gas to pay interest of its outstanding debt.

To give relief to highly indebted NOC, Ministry of Commerce and Supplies had planned to change the current capital structure and turn its government loan into shares, though the Finance Ministry is not very much enthusiastic of the idea.

According to the Austerity Regulation brought by the Finance Ministry this week, the government is not going to lend or grant subsidy out of the budget programme. “The government is not going to invest or lend any public entity out of the budget,” the regulation read.

In the programme, president of Nepal petroleum Transporters’ Federation Khageshwar Bohora said that the outflow of petroleum product to India has increased due to low price in Nepal.

The federation estimated that around 25 per cent fuel has out-flowed to India since Nepal failed to adjust price according to the Indian market. “The government should adjust the price in line with the bordering districts to stop out flow to India,” Bohora said, demanding to ease the petroleum product import procedure.

Currently, the tankers that have been importing fuel from Indian Oil Corporation are paying Rs 850 million extra vehicle tax in India and Rs 200 million permission charge to the Indian Embassy, he said, suggesting the Nepal government to hold discussion with India to scrap such unwarranted tax.

Secretary at the Ministry of Commerce and Supplies Purushottam Ojha once again charged the transport entrepreneurs for promoting syndicate and cartel. “The federation should understand the sensitivity of petroleum business,” he lamented, requesting them not to take to street to fulfil their demands.

IOC-NOC contract renewal

KATHMANDU: Ministry of Commerce and Supplies has started homwork for contract renewal with sole supplier Indian Oil Corporation. The two entities had reached into a five-year contract in 2007. The duty drawback and other taxes have been main dispute between them in the recent days, according to minister for Commerce and Supplies Lekh Raj Bhatta. The High Level Committee led by lawmaker Bhim Acharya had also suggested the ministry to amend law. The contract will remain effective until April 1, 2012. The ministry is committed to amend the law according to the international norms.
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CALL FOR INCREASED SOUTH ASIAN TRADE TO BOOST INTEGRATION


Kathmandu, 23 Sept.: Fourth SAARC Business Leaders Conclave (SBLC) concluded here today [Thursday] with a promise of regional economic integration for full utilisation of benefits of geographical proximity to expand trade and intra-regional investment, The Himalayan Times reports.

Issuing the nine-point Kathmandu Declaration, the conclave urged the governments of the member countries to engage seriously on regional connectivity to achieve peace and prosperity.

The declaration recommended harmonisation of customs procedures and mutual recognition of Standards and Certifications along with adoption of Open Sky policy in the region - linking not only directs flights between capitals but to all other major cities.

“The economic union of South Asian nations can succeed only in the presence of strong political will to bring down the existing trade barriers,” the experts said during the discussions in sessions.

South Asian nations have similar economic characteristics, have similar export profile and trading partners, industrial characteristics are also more or less comparable and the demography is also alike that makes adopting uniformity as a single entity might not be difficult, pointed out head of Research Analysis Directorate of Pakistan Mujeeb Ahmad Khan.

“The economic similarity among neighbouring countries will enable them to free trade agreement and work for deeper economic integration to form a common market, provided nations are able to trust each other and allow the strongest one in the union -India to lead the way,” he added.

Despite the signing up of South Asian Free Trading Area (SAFTA) agreement, the region is still plagued by the existing of non-tariff barriers that does not allow free movement of commodities.

The greater economic cooperation among SAFTA nations holds important implications in the form of larger market and economies of scale in production. The business community has also recommended signing of Regional Investment Treaty and up-gradation of SAFTA into a Comprehensive Economic Partnership Agreement for the Region.

However, South Asia is also least integrated region in the world where despite the proximity of distance transporting any commodity takes 17 to 41 days starting from document processing, customs clearance, port handling to inland transportation. “It is more than average time taken for export in developing countries where export takes about 30 days to reach destination,” said Parmita Das Gupta from IFC. “Mere 10 per cent reduction in export time can boost the trade.”
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