September 7: The external sector of the economy is under pressure due to the devaluation of Nepalese currency. As Nepal has to pay the loans and interest taken from different countries and donor agencies in US dollars or other convertible currencies, the external sector is under pressure due to the rising price of US dollar.

Nepal has been taking loans in US dollar, euro, Chinese yuan, Japanese yen, and British pound. The country needs to pay the interest on such loans in foreign currency.

Of late, the Nepalese currency is being devalued against the US dollar and other foreign currencies resulting in pressure to the external sector.

Under Secretary at the Public Debt Management Office, Dinesh Regmi, admits that the country’s external sector is under pressure to manage foreign debt due to the devaluation of Nepalese currency.

“The foreign loans have to be paid in terms of US dollars or other foreign currency. Since the value of US dollar is increasing, the amount of loan to be repaid by the country is also increasing,” said Regmi.

“The foreign exchange rate is causing problems for us a lot,” he added.

Nepal has to bear an additional cost of Rs 22.7 billion while repaying foreign debt every three months due to the volatile foreign exchange rate. According to the office, Nepal paid a total of Rs 117.42 billion as loan and interest during the last fiscal year. During the review year, Nepal repaid loans of Rs 72.8 billion and interest of Rs 44.61.

Nepal had to pay a fine of Rs 41 million during the last fiscal year, the Public Debt Management Office informed. According to the office, the fine was imposed due to the delay in payment of the interest and loans.

Meanwhile, Nepal’s public debt has been increasing in recent years. As per the latest data released by the Public Debt Management Office, the total public debt of Nepal is more than Rs 2011 billion. Out of this amount, Nepal’s foreign debt is Rs 1025 billion while internal debt is Rs 900.86 billion.

The public debt of Nepal increased by around Rs 300 billion by the end of last fiscal year (FY 2021/22) as compared to the previous fiscal year (FY 2020/21). Nepal’s public debt was Rs 1737 by the end of Fiscal Year 2020/21.