Governor urges for credit rating agency in Nepal

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KATHMANDU, April 20 - Governor of Nepal Rastra Bank (NRB) Dr Tilak Rawal, on Friday, stressed the need of credit rating agency in the present financial scenario of Nepal. The provision of such agency was mentioned in the last year’s budget speech.

Addressing a seminar on Investment Information and Credit Rating in Nepal, Dr Rawal said that the central bank is keen to see such agency established within the current fiscal year. The seminar was organized by Vishal Group in association with Investment and Information Credit Rating Agency Limited (ICRA), India.

Highlighting the role of private sector in providing better financial services, he expressed the hope that the presence of ICRA to Nepal would be helpful in bringing its international credit rating expertise and experiences to expand financial activities in Nepal.

Ram Babu Pant, Deputy Governor of NRB, outlined the importance of credit rating agency for the medium term financial reforms frameworks in Nepal. Appreciating the initiation of private sectors in such business, he said that the credit rating agency is an integral part of the on-going reform process in Nepal.

T C Agrawal, Vice Chairman of the Group, said that establishment of credit rating agency is a landmark step in developing financial market in Nepal and informed that the credit rating agency would be promoted by a broad cross section on investors, representatives all major institutional sectors of Nepal.

Dr Bishwamber Pyakurel underlined the need of credit rating agency, as it would help to consolidate the growth of market and to provide necessary safeguards for the interest of the investors.

Minister assures of making NEA efficient

KATHMANDU, April 20 (PR) - Minister for water Resources Bala Dev Sharma Majgaiya has said that the government will hold discussions with the concerned on purchasing the power generated by private enterprises.

During an interaction with businessmen Thursday, Majgaiya also said that necessary works to cut down unproductive administrative cost of Nepal Electricity Authority (NEA) and control power leakage would also be initiated.

FNCCI President Pradeep Kumar Shrestha said that load shedding is a perennial problem therefore, the government should find out long-term solution to it. He also suggested the government to make arrangement for connecting the captive power of the private sectors to the national grid.

Bishnu Bam Malla, Executive Director of NEA, said that the Authority was forced to adopt load shedding due to dry weather and added that the NEA would cut power in such a way so that the industrial sector would be least affected.

PM opens Himalayan Expo

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KATHMANDU, April 20 - Prime Minister Girija Prasad Koirala inaugurated the Eleventh Himalayan Expo 2001 amid a function at Bhrikuti Mandap Friday.

In his inaugural speech, PM Koirala said that such trade fares held frequently would help promote the economic activities and liberal market-oriented policy.

Various national and international entrepreneurs are participating in the exhibition, in which more than 22 British businesses, ranging from airlines to banking and from manufacturing to education enterprises, are participating.

Speaking on the occasion, Ronald P Nash, British Ambassador to Nepal said that such exhibition provides a good opportunity for Nepalese and other customers to obtain information on the latest foreign products and their latest technology.

He further said that the economy will only be able to expand employment opportunities when business flourishes with increased domestic and foreign investment.

The British pavilion is also providing web site access to the visitors to inform on various services they are providing.

German Ambassador to Nepal Rudger Lemp said that such Expo will provide an excellent opportunity to enhance mutual cooperation between the businessmen of various countries.

This is the event, which brings people and businessmen from different countries together and help understand each others’ problems and preferences, said Rajendra K. Khetan, President of Nepal Britain Chamber of Commerce and Industry. The four-day long Expo is organized by the House of Rajkarnikar.

Inflation low, expenditure soars, export growth continues: NRB

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KATHMAHDU, April 20 - The first eight months of the current fiscal year 2000/01 have been marked with a deceleration in momentary aggregates and an acceleration in fiscal expenditure and revenue. Total government expenditure has accelerated due mainly to a pick up in regular expenditure despite a slowdown in development as well as freeze expenditure growth, according to press release issued by Nepal Rastra Bank today. During the review period, resources mobilization grew by 19.2 percent as a result of higher growth in both revenue receipts and foreign cash grants. However, because of higher growth of government spendings, budgetary deficit widened by 37.2 percent during the review period. The rate of inflation, on point to point basis, was recorded at 1.4 percent, mainly because of the decline in the prices of food and beverages group.

In the external front, and impressive growth of exports accompanied by a comparatively slower growth of imports helped narrow down the trade deficit during the review period. The foreign exchange holdings of the banking system increased substantially due to a surplus in the balance of payment emanating from the growth in official and miscellaneous capital inflows and decline in the trade deficit. The resulting foreign exchange reserves was sufficient to cover merchandise imports of more than eleven months. In the share market, share transaction went up compared to the previous month. In the money market, treasury bills rate remained at 4.7 percent whereas the inter bank rate stood at 4.3 percent.

During the first eight months of fiscal year 2000/01, broad money registered a declaring growth of 7.6 percent (Rs 14126.6 million) to Rs 200247.5 million compared to growth of 15.2 percent (Rs 23250.4 million) during the same period last year. A deceleration in the growth of both net domestic assets and net foreign assets compared to last year was attributed for such a deceleration in broad money.

The downward revision in interest rates on deposits, upsurge in the stock market activities and rapid growth in foreign currency deposits with banks led to the deceleration in the growth of time deposits from 15.6 percent (Rs 15887.1 million) last year to 6.4 percent (Rs 7967.8 million) this year. Narrow money also decelerated to 10.1 percent (Rs 6158.8 million) during the review period compared to a growth of 14.4 percent (Rs 7363.3 million) during the same period last year, states the release.

As a result of a slow growth in credit flow to the government and government enterprises total domestic credit of the banking system decelerated from 10.6 percent (Rs 14321.4 million) last year to 10.3 percent (Rs 16256.9 million) this year. The flow of bank credit to the private sector increased by 11.3 percent (Rs 12334.5 million) during the review period compared to the same 11.3 percent (Rs 10275.0 million) in the preceding year.

On the fiscal front, total government expenditure during the review period registered a comparatively higher growth of 22.4 percent amounting to Rs 38057.1 million as against a growth of 17.0 percent during the same period last year. Of the total government expenditure, regular expenditure, development expenditure and freeze expenditure increased by 27.1 percent, 14.4 percent and 5.3 percent respectively.

During the review period, revenue collection increased by 18.1 percent to Rs 28240.2 million compared to a lower growth of 12.1 percent during same period last year. A significant growth in revenue collection coupled with an impressive growth in foreign cash grant has contributed to the growth of resources mobilization to 19.2 percent compared to 7.8 percent last year, adds the release. However , such a growth rate of resources mobilization remaining lower than government expenditure, a budget deficit of RS 7640.1 million was incurred during the review period. To meet the resources gap, the government issued national saving bonds worth Rs 1000.0 million, development bonds worth RS 1000.0 treasury bills worth RS 1234.4 million and mobilized foreign cash loan amounting to RS 2799.5 million. The remaining amount of Rs 1606.2 million was overdrawn from Nepal Rastra Bank.

The National Urban Price Index, on point to point basis, recorded a rise of 1.4 percent during the review period compared to a rise of 3.6 percent last year. A fall in the prices of food and beverages group helped the rate of inflation to be contained at such a low level. Of the overall price index, price index of food and beverages group declined by 3.6 percent during the review period compared to a stagnant situation during same last year. Price index of non-food and services group slowed down to 6.9 percent during the review period from 7.9 percent last year.

Region wise, price indexes of Kathmandu and Hills have respectively increased by 1.4 percent and 5.9 percent and that to Terai has decreased by 0.3 percent. A significant decline (5.9 percent) in the price index of food and beverages group in the terai helped the overall price index to remain at such a low level. Because of the depreciation of Nepalese currency and a rise in the prices of petroleum products, the price index of imported goods increased by 7.2 percent during the review period as against an increase of 4.8 percent last year.

Similarly, as a consequence of the upward revision in the price of petroleum products, the price index of government controlled goods increased to 9.7 percent during the review year compared to 8.3 percent last year.

According to the release, on the external front exports registered a decelerated growth of 19.7 percent to Rs 38900.1 million during the review period compared to a growth of 41.6 percent during the same period last year. Exports to India went up by 27.2 percent whereas that to third countries grew by 14.0 percent. The export of readymade garments, woolen carpets and jewelry to third countries declined whereas that of pashmina, tanned skin and pulses increased significantly. During the review period, Rs 6.15 billion worth of pashmina was exported.

During the review period, imports have increased at a decelerating rate of 8.5 percent amounting to Rs 75184.7 million as against 29.1 percent growth during the same period last year. During the review period import of vehicles and parts, textile, thread, cement, chemicals, agricultural tools and parts as well as other machinery from India and raw wool, pertroleum products, beatle nut, plastic granules, copper wire and sheet, thread, textile, computer parts, aeroplane parts, medicine, camera and palm oil from third countries have increased compared to that of last year, states the release.

During the review period, the growth rate of exports was high while that of imports remained low compared to that of last year. As a result trade deficit, during the review period, declined by 1.4 percent and amounted to Rs 36284.6 million compared to the growth of 19.8 percent in the previous year. The export-import ratio, which was 46.9 percent in the previous year, improved to 51.7 percent during the review period.

Based on the available balance of payments statistics for the first six months of the current fiscal year, the balance of payments remained favourable by Rs 3516.9 million. During this period, decline in net services income has resulted in the current account deficit of Rs 4753.3 million in spite of a decrease in trade balance compared to the same period last year.

However, a substantial inflow of miscellaneous capital items helped the balance of payments to remain positive. Based on the monetary statistics for the first eight months of the current fiscal year, the overall balance of payments recorded a surplus of Rs 8872.1 million. Foreign exchange holdings in the banking system increased by 18.4 percent to Rs 107608.0 million as at mid-March 2001. Of the total reserves, 79.1 percent accounted for convertible currency.

In the share market, market capitalisation of these companies listed in the Stock Exchange decreased to Rs 50.2 billion at mid-March 2001 from Rs 55.9 billion in the previous month. Likewise, NEPSE index decreased from 455.34 in the previous month to 395.85 at mid-March 2001 concludes the release.

Feasibility study on new millennium trekking route completed

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SYANGJA, April 20 - The government, in cooperation with Trekking Agents Association of Nepal (TAAN), Pokhara
Chapter and some experts, completed the feasibility study of the Nepal’s first millennium trekking route extending from Dhorfirdi of Tanahun district to Majhkoto of Syangja district.

The study was conducted by 27-member team with an aim of developing village tourism as an approved program of the government in its bid to celebrate 2002 as Destination Nepal Year (DNY). The team was headed by Tourism Office, Pokhara and other members were tourists, experts and technicians.

The route comprises diverse landscape, culture, custom and cuisine and exhilarated the visitors with its unique touch.

According a press release issued by the Tourism Office, Pokhara, visitors can see the majestic beauty of Banjirewa Himal in the west to Ganesh Himal from the east of the route along with a view of terai region on the south.

The other attractions of the route include Cave of Ghaderi, Kolmakot, Majhkot, among others. Experts have identified Kolmakot as the perfect venue for gliding. Budakot is the highest point on the route, 7000 feet from the sea level and locals claimed that Bhimsen tower of Kathmandu could be seen from Budakot on a day with clear weather.

The team has suggested to develop infrastructures like telephone, cultural houses, improvement of trails, conservation of cultural heritage and related training for the sustainable development of tourism along the route.

The tourists participating in the survey were overwhelmed by the cultural diversity of the route that includes traditional dances like Chutka, Koara, Soradhi, Krishan Charitram, Ghantu and Bhajans. "This is probably the best route in Nepal," said Marisha William, a tourist, adding that the attraction would touch every visitor.

Tourism Office, Pokhara and TAAN-Pokhara Chapter have already initiated works on formally opening the route by the beginning of 2002.