Nepal should engage in monetary tightening to bolster forex, says IMF

Nepal should engage in monetary tightening including interest rate hikes to bolster its dwindling foreign exchange reserves, without resorting to import curbs that could push up prices and hamper economic growth, a senior International Monetary Fund (IMF) official said on Wednesday.

The government must address inflationary pressures and growing external imbalances while safeguarding the economic recovery, Robert Gregory, head of an IMF team that held week-long discussions with government officials, said in a statement.

Nepal, a landlocked country between China and India, has banned luxury goods imports until mid-July to rein in capital outflows as foreign exchange reserves fell over