Nepali rupee depreciates
Most South Asian currencies slide

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KATHMANDU, Oct 8 - Nepali rupee today depreciated by 25 paisa against the American dollar. Such depreciation is the second time after the September 11 terror strikes in the United States.

The official selling rate of the Nepali rupee today vis-a-vis the greenback slid to Rs 76.85 from the Sunday’s rate of Rs 75.60. This is the third time the rupee has plunged against the dollar in a month, depreciating by almost 1 per cent in the period.

Experts have blamed the terror strikes in the US and the subsequent retaliation beginning on Sunday as the main cause behind the latest slide. Uncertainty fuelled by the latest US-led attack on Afghanistan prompted Indian businessmen scurrying for dollars, raising its exchange rate.

And since Nepal maintains a fixed exchange rate with India, any fluctuation in the Indian foreign exchange rate is automatically propagated to the Nepali forex markets. Indian rupee vis-à-vis the Nepali currency is traded at Rs 1.6.

It is not only the Indian and the Nepali rupee that have slid vis-à-vis the dollar today. Other South Asian currencies too did not fare well, except the Taiwan dollar and the South Korean won.

AFP, an international news agency, adds that the dollar, however, weakened against the other East Asian and European currencies. Both yen and euro fare better as markets turned to avert risk due to the American war on terrorism.

AFP adds that the Asian currencies are unlikely to rise against the greenback because of the region’s export-oriented economies’ heavy dependency on the US markets.

Though depreciation of the rupee each time increases the competitiveness of the Nepali products in the international markets, it also, at the same time, increases the financial liabilities of importers and even the government.

Nepal Bankers’ Association to press NRB for introducing relief measures

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KATHMANDU, Oct 8 - Nepal Bankers’ Association (NBA) has decided to request Nepal Rastra Bank (NRB), the central bank of the country, to introduce some relief measures to lighten the increasing financial liabilities of the tourism and export-oriented industries.

The decision comes after the NBA was repeatedly requested by tourism entrepreneurs and exporters to take steps to uplift the tourism and export-oriented industries from the precarious position that they are presently in.

The NBA board meeting last Friday decided to lodge formal request to the central bank. "We anticipate some positive steps aimed at providing some aid to the tourism and export oriented industries that can safeguard them from collapsing completely," said Narendra Bhattarai, President of the association, talking to The Kathmandu Post.

Bhattarai said the central bank is only the authority that can take such relief measures. He also said that it is high time that the central bank and the government announce some programmes to help the ailing industries, which are hard hit by the ongoing domestic as well as international incidents.

Among other, the association has also decided to request for relaxing the existing provisions on loan loss and waiving of interest on loans extended to such industries. "Deferment of the payment deadline of loans is one of the steps that the commercial banks can take if the central bank approves such measures," said Bhattarai.

The latest pressure of the business community on bankers come at a time when the tourism industry as well as the export oriented industries are blighted by a difficult environment, largely due to domestic violence and the latest terror strike in the US.

Tourist inflow as of September end has declined by over 29 per cent as compared to the same period last year mainly due to the combined effect of worsening law and order situation and the latest American attack on Afghanistan in retaliation to the September 11 terrorist attacks on key American installations.

Similarly, the export oriented industries are also facing similar trouble in recent months. The export of major exportable items, like ready-made garments, woolen carpets and pashmina has continuously been shrinking for the last six months.

Procedural delays may fuel sugar shortage

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KATHMANDU, Oct 8 - Despite the latest order issued by the Supreme Court to allow Nepal Food Corporation (NFC) and National Trading Ltd. (NTL) to import sugar to meet its heightened demand during the Dashain festival, sugar shortage is still likely due to procedural delays, said officials.

NFC is awaiting a written statement from the apex court for forwarding its import processes, which is delaying the opening of the sealed tenders that are presently lying with the corporation, officials said Monday.

"The sealed tenders obtained by the NFC have not been opened so far. A written statement of the Supreme Court is yet to be received preventing the opening of the bids. We are trying to get the written order soon," said a high-level official at the NFC.

Delay in procuring the written order of the court will delay the opening of the bids, and hence sugar imports, which can lead to sugar shortage at the onset of the Dashain festival, the official said..

However, the NFC source added that the corporation will hold a board meeting on Tuesday to explore ways to avert the shortage. Meanwhile, the NTL board members met today to avoid sugar crunch. No details were, however, available.

The sugar import issue had reached the Supreme Court recently when Manju Tiwari of MM Suppliers, Kuleswor had filed a writ at the apex court demanding an interim order to stall the import of sugar citing irregularities in the tenders called by the corporation.

The plaintiff in the writ had argued that the time-frame for submitting the tenders were too short, which was against regulations. However, the Supreme Court quashed the writ last Friday.

The Cabinet recently had decided to allow NFC and NTL to import 60 thousand tons of sugar at ten per cent customs duty, bringing it down from the previous level of 40 per cent.

The government over an year ago had raised the customs tariff for sugar to 40 per cent to protect the domestic sugar industries. There are eleven sugar mills in the country presently.

The Cabinet’s decision was in a bid to avert the perennial sugar shortage during the Hindu festival, when the demand for the commodity rises three to four folds the normal demand.

Annual demand for sugar in Nepal stands at almost one hundred forty thousand tons. Though Nepal is self sufficient in sugar during normal periods, unfavourable weather conditions reduced sugarcane output, fuelling sugar shortage.

Three-day pashmina exhibition organised

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KATHMANDU, Oct 8 – Federation of Nepalese Cottage and Small Industries (FNCSI) organized a three-day exhibition of Dhaka, handmade Nepali cloths and Pashmina today, with a view to promoting those products in the international market.

A one-day seminar on patent right registration of Dhaka products and Market Expansion was also organized Monday.

Speaking at the opening ceremony of the exhibition, Basudev Giri, president of the FNCSI said that the cottage and small industries has more than 80 per cent share in the total industrial production, which has less than 18 per cent of the total industrial investment.

About 67 per cent of the industrial employees are engaged with the cottage and small industries and they employ more women. They are scattered all over the country irrespective of the geographical structure, so they should be given priority, he said.

At a time when exportable items are declining each month and there is an immediate need for identifying new items and Dhaka products can be one of the alternatives if we can promote it in the international market efficiently, he added.

As Nepal is to join the World Trade Organization (WTO) and South Asian Free Trade Area, we have to strengthen competitiveness to sustain in the regional and international market. The government has to play major role in the development of the small industries, he said.

He also said that 60 per cent of small industries are sick and there is a need for the rehabilitation of sick industries.

Bhanu Prasad Acharya, the secretary at Ministry of Industry, Commerce and Supplies said, the current industrial policy is being revised in order to encourage the private sector investment and make it friendly to the industrialists. Furthermore, the long-term industrial policy is also being formed, he added.

Bharat Mohan Adhikari, former Finance Minister, said that the government has to give more priority to strengthen the cottage and small industries.

"Due to inefficient government machinery, the exportable goods are losing its international market", he added.

He further said, the government has to bring suitable package to encourage the industrialists at this difficult times.

In his inaugural speech Minister for Physical Planning and Works, Chiranjibi Wagle stressed upon joint effort of the private sector and the government to regain the economic mobility.

There are 40 stalls in the exhibition and the organizers are expecting 50,000 visitors to participate in the exhibition. "We are expecting a turnover of Rs 300 million in the fare," said Suresh Pradhan, General Secretary of the FNCSI.

Ravi Bhakta Shrestha, the President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Ramesh Shrestha, former president of FNCSI, and Leon Houdret, project Manager of Swiss contract/SIP-P also spoke on the occasion.

Nepal, South Korea sign trade accord

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KATHMANDU, Oct 8 – Nepal and South Korea signed two documents last Friday on trade related matters, states a release by the Ministry of Foreign Affairs issued here today.

The documents –an arrangement on consultations and an agreement on avoiding double taxation and prevention of fiscal evasion of taxes – were signed in the South Korean capital of Seoul by Nepal’s Foreign Secretary Narayan Shumsher Thapa and South Korea’s Vice Minister for Foreign Affairs and Trade Sung-Hong Choi.

Prior to this meeting, Thapa held discussions on bilateral trade and investments as well as economic co-operation with the Executive Vice President of the Korea Chamber of Commerce and Industry and Executive Director of the Korean International Co-operation Agency (KOICA).

The Foreign Secretary also met Ms Kim Soung-Ja, Vice Minister for Labour the next day and discussed matters relating to Nepalese workers in the Republic of Korea.

Thapa requested the Korean Vice Minister to increase quota for Nepali workers and also asked for work permits of longer duration to the Nepalese working in South Korea. Soung-Ja assured Thapa that her government would look into the matter and inform Nepal accordingly. South Korea also agreed to further facilitate the selection process of Nepalese workers going to the country.

The Foreign Secretary left Seoul today for Beijing where he will be holding talks with his Chinese counterpart, Vice Minister Wang Yi.

NTB to establish monitoring cell

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KATHMANDU, Oct 8 – Nepal Tourism Board (NTB) has decided to establish a Monitoring Cell to regulate the products and services of the hotels, resorts and restaurants, which is expected to come into effect within November.

"The Cell would inspect products and services of hotels, resorts and restaurants and would suggest for penalty if any were found violating the service standard as recommended by the Government three years back," says Subash Nirola, Director at NTB.

The Government set certain service standard to all types of hotels - star and non-star - three years back for hotels, but was not implemented till date. The recommended service standard includes facilities like parking space, front office, furniture, and availability of drinks and other foods standard. It also had provision for standard and quality of foods in the restaurants.

"Many hotels’ service standard is not up to the recommended requirement due to weak monitoring system," says Nirola. "After the new Cell starts functioning, we will take strong action against hotels, resorts and restaurants which do not meet the requirement or violate the rules in an impartial manner", he added.

The Monitoring Cell would work in two levels: field and ministry level. The field level inspects and suggests for punishments. And Ministry of Culture, Tourism and Civil Aviation (MoCTCA) takes action against such wrongdoers.

"Currently hotels are heavily undercutting prices in order to attract more tourists, the Cell would make efforts to control price undercutting," says Nirola.

He also said that NTB has received the legal rights to monitor the discrepancy in the sector from last August. Under the previous provision, NTB had no legal authority to monitor the services provided by tourism enterprises.

The monitoring cell includes an official from the MoCTCA, NTB and other tourism related organizations.