April 12: Former governor of Nepal Rastra Bank (NRB) Dr Chiranjivi Nepal has pointed to the policy adopted by the central bank as the main reason for liquidity crisis in the country.

Speaking at the annual general meeting (AGM) of the Federation of Nepalese Chamber of Commerce and Industries (FNCCI) on Monday, the former governor said that the problem surfaced after the Covid-19 pandemic as the NRB was the only institution to provide support for post-Covid recovery when the government should also have done something.

“Liquidity crisis has become a long-term problem in Nepal,” said the former governor, adding, “There was excessive flow of credit after the pandemic subsided, causing the crisis. We identified exportable products but couldn’t export them. On the other hand, import of food items has increased excessively.”

He also accused the government of failing to spend capital budget and urged the concerned authorities to send the money to the banking system.

Former Governor Nepal was of the view that remittance cannot be a source for sustainable economic development and therefore the time has come for the government to explore other alternatives.

He also clarified that Nepal’s situation cannot be compared to Sri Lanka. According to him, Nepal hasn’t taken loan at exorbitant rate like Sri Lanka.