DOLLAR, GOLD GAIN Kathmandu, 10 July: The dollar gained Tuesday in the Nepali market after a four-day continuous fall. Nepal Rashtra Bank (BRB) fixed Tuesday’s exchange rate at Rs. 89.75 after it fell to Rs. 87.30aise. Gold Monday gained Rs.200 and was priced at Rs. 56,400 per tola. Nnnn MAOIST CHIEF DFENDS, PEACE, STATUTE Kathmandu, 10 July: UCPN (Maoist) Chairman Pushpa Kamal Dahal has defended his party’s line of peace and constitution, stating that the signing of the 12-point understanding in 2005 was “fundamentally correct” and that India’s supportive role was crucial to the ongoing peace and constitution writing processes, Kamal Dev Bhattarai writes in The Kathmandu Post.. The then rebel Maoists and the Seven-Party Alliance inked the historic 12-point agreement to end the 10-year armed conflict and replace the monarchy with a republic. In a political document presented in the party’s Politburo meeting on Monday, Dahal said the party must stand firm on the line of peace and constitution, while correcting “past mistakes”, including the handling of the Rookmangud Katawal case, the election of the President and the Vice President and the recent split in the party. The Maoist government in May 2009 fired Katawal, the then Army chief, accusing him of disobeying orders. The party’s hard-line faction had accused Dahal and Prime Minister Baburam Bhattarai of a revisionist approach. Since the Mohan Baidya faction split to form a new party, Dahal is having a tough time convincing cadres that the party has not deviated from its core ideology. In the document, he further said that the party should take the ownership of all political gains made so far. According to a leader close to Bhattarai, although Dahal has tried to carve out his own political line, it is very similar to the one propagated by the prime minister. Dahal also said that a new constitution must be promulgated by the CA, but that he is open to both resurrection of the assembly and fresh elections. He proposed that the party’s General Convention elect a new party leadership. The Bhattarai faction reacted positively to Dahal’s document. “In comparison to past documents, Dahal has come up with a clear stance on peace and constitution. It is less likely that we will present a separate document from our side at the plenum,” said pro-Bhattarai Politburo member Devendra Poudel. His political document • 12-point pact in 2005 was 'fundamentally correct' • India's supportive role crucial to peace, constitution processes • Must correct 'past mistakes' • Party must take ownership of all political gains • New statute from CA, but open to resurrection of the assembly and fresh elections Nnnn IFC, ADB PROPOSE NEPALI RUPEE BONDS Kathmandu, 10 July: International Finance Corporation (IFC), the private sector lending arm of the World Bank Group, and Asian Development Bank have proposed to issue Nepali rupee bonds to raise funds and finance major infrastructure projects Here, Prithvi Man Shresthawrites in The Kathmandu Post writes.. Nepal Rastra Bank (NRB) Governor Yubaraj Khatiwada said the two lenders have proposed issuing Rs 20-billion Nepali rupee bonds—Rs 10 billion each. Given the country in urgent need for resources to fund long-term infrastructure projects, Khat-iwada said the issuance of bonds would help generate the required funds. Funds raised from the bond issuance will be used in Nepal only, according to Nepali officials. Nepali banks have long been resisting the temptation of investing in long-term infrastructure projects as the maturity period of their funds does not match with the time infrastructure projects take for generating revenues to repay loans. Khatiwada said the central bank has ‘cleared the way’ for the bond issuance. He, however, said the Finance Ministry should settle the issue of taxation and issue manager of the bonds. Both ADB and IFC have also talked to the ministry about the matter, submitting separate proposals. Although ADB made such a proposal a year ago, IFC made its proposal last week, according to the ministry. “We are holding discussions and they have so far been positive,” said Baikuntha Aryal, joint secretary at the ministry, adding he was yet to go through the details of the proposals. In its proposal, ADB has asked the government to allow it to exchange the proceeds of the Nepali currency bonds for the currency of any another member of ADB without restriction and buy and sell the bonds in Nepal. ADB has also sought exemption of taxes, including value added tax, transaction tax and stamp duties, among others. Other conditions put forth by ADB are a confirmation that the tax exemption would apply to any amount payable by ADB or paid to ADB from transactions that may be undertaken in connection with the Nepali currency bonds; such bonds would not be subject to withholding, specifically allowing ADB and its agents to make interest payment to bondholders on gross basis without deduction for any withholding tax; ADB would not be required to disclose its financial transactions to any regulatory authority; and ADB would not require registering the bonds under any security laws and regulation of Nepal. IFC has also talked with Nepali banks on the scope and the market for Nepali rupee bonds. NIC Bank chief executive Sashin Joshi said the international lender had consulted with them on interest rate and whether such bonds would be accepted here. He said the move taken by IFC and ADB is positive for the banking industry as local banks could invest their surplus funds in the bonds. nnnn