Top Economic news for this week- 25th Poush to 1st Magh

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– Aakriti Dangal, Kathmandu

Magh 2, 2072- This week's main events that provide insight into current Nepalese economic environment have been briefly presented below:

  • The plunge in global market price for crude oil has reached its 12-year low to $32 per barrel in the international market. It is estimated that there will be further decline in crude oil price in the international market. However, Nepalese consumers have not been able to benefit from the falling oil price as there is no enough supply and consumers are paying high price due to the existence of black market.
  • The fuel crisis has led to increase in deforestation in Nepal. According to Karna Bahadur Raut, Chairperson of Hasposa Com-munity Forest in Sunsari, around 500 people are going in search of firewood on regular basis as they are not able to refuel the gas cylinders. The ongoing crisis due to Terai unrest and undeclared blockade is leading to rampant deforestation.
  • The up-gradation of Gautam Buddha airport has resumed which was halted due to blockade and officials have reported that it will be completed within time. The fuel necessary for up-gradation will be managed at local levels. This airport will be the second international airport which may increase the flow of tourists in Nepal.
  •  The fund of Rs. 10,000 allocated for 23 districts has been released for the earthquake affected districts. As there are reports that several earthquake survivors in hill and mountainous region are suffering due to cold, the Commission for Investigation of Abuse of Authority (CIAA) has also asked the government for effective distribution of relief materials, including warm clothes and foods.
  • The Indian customs offices in the Jogbani customs of Biratnagar have started charging fee for vehicles with Nepalese number plate. However, this provision is not applicable to the vehicles carrying industrial goods. According to one of the officers of Biratnagar customs office the reason for such provision is to reduce excessive traffic and disturbances to commuters and cargo vehicles in Jogbani area from the freely entering Nepali vehicles.
  • The increasing trend of governors to work in Banking and financial institutions has led to conflict of interest. So, a new amendment bill to the Nepal Rastra Bank (NRB) Act 2002 has prohibited the central bank governor from working in banks and financial institutions (BFIs) in any capacities after his/her retirement. In addition to that, the deputy governors are restricted for seven years and executive directors for five years in any capacities from working in any BFIs for after his/her retirement. Currently the bill is under discussion in the Parliament.
  • The number of tourists visiting Nepal has declined by 24.9% than 2014. Even though, there is no drastic decline in the number, but the tourism sector has been hit badly. The number of tourist shown by the data is not representing actual number of tourists because the data includes the people who visited Nepal for rescue and relief work too.
  • The plan of government to encourage farmers by providing subsidized agro loan did not work well. BFIs are saying that the lack of demand for loan from farmers is the real problem whereas farmers are complaining that there is reluctance of BFIs to provide loan. However, the real reason is yet to be known and Gagan Thapa, chairman of the committee with his committee members is studying the factors responsible for this.
  • A total of 13 companies are awaiting approval from Securities Board of Nepal (SEBON) to launch their initial public offering (IPO) of worth Rs. 6.14 billion. Dibyashwari's IPO is the biggest one among these companies’ IPO with the worth of Rs. 264 million.
  • In order to support industries that have been affected by earthquake and ongoing fuel crisis, government has come up with the plan of providing interest rate subsidy from Economic Rehabilitation Fund. The subsidy will only be provided to those industries whose production fell by 50% during the first six months of fiscal year 2015/16 than 2014/15.
  • Nepal Credit and Commerce (NCC) Bank and Kumari Bank Ltd have decided to go undergo merger. Under the new policy set by the central bank, a commercial bank should raise its minimum paid-up capital by four times to Rs.8 billion by mid-July 2017, which has resulted many commercial banks to go for merger.
  • According to the revised National Trade Integration Strategy (NTIS), the list of the potential exportable goods and services has dropped down to 12 from 19. According to the draft, the new list has 9 goods and 3 services.
  • The much awaited full-fledged operation of central depository system (CDS) will start from Sunday. This new system of dematerialized trading will replace the current paper-based trading system. According to CDSCL data, there are 146,092 demat accounts opened by the investors while 299.46 million units of shares are in demat form.
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"This summarized news has been written on the basis of news published on The Kathmandu Post and My Republica"