The Reserve Bank of India has stepped in to avert a foreign exchange problem in Nepal. This comes as a relief to those exporting goods to the Himalayan kingdom as they were not sure of getting paid for their exports until now.With the Maoist movement in Nepal intensifying since late 2003, the supply of the Indian rupee has almost dried up as the tourist inflow from India has come to a grinding halt.Some Indian companies have scaled down their operations in the Himalayan kingdom in the last year or so. As a result, there is a huge scarcity of the Indian rupee in Nepal. At the same time, Nepal is required to pay India in Indian rupees for all its imports, according to a trade agreement between the two countries. India is a net exporter to Nepal and the world’s sole Hindu nation needs around Rs 10 crore in INR daily to pay for imports from its neighbour. A solution worked out by the Indian government in consultation with the RBI now allowed the Nepal government to deposit dollars equivalent to rupee payments that were due to India, sources close to the development told Business Standard. The dollars will be… Read full this story
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