Govt’s Inability to Spend Causing Liquidity Crunch

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Govt’s Inability to Spend Causing Liquidity Crunch

May 9: Nepal Rastra Bank (NRB) Governor Dr Chiranjivi Nepal has urged the government to increase the capital expenditure to make the country’s economy more vibrant. Speaking at a pre-budget discussion held at the Finance Committee of Parliament on Thursday, Governor Nepal claimed that the banking sector has been facing a liquidity crunch due to the government’s inability to increase the capital expenditure.

The central bank governor also stressed the need for increasing revenue collection and spending at the provincial and local levels.

He told the parliamentary panel that the country’s trade deficit is quite high with imports standing at a staggering Rs 949 billion and the exports merely at Rs 61 billion in the current fiscal year so far. Arguing that the inflow of remittance will not always remain encouraging, the NRB governor said that the country should focus on ways to increase productivity in order to reduce the trade deficit.


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