Kathmandu, August 24:

Confederation of Nepalese Industries (CNI) has underlined a need for necessary legislative reforms as well as policy formulation to fully enact the new Monetary Policy.

In its observations, CNI hailed the monetary policy for acknowledging the need for certain critical departures to make the private sector more competitive in the context of changing global environment.

The opening of the capital account convertibility cautiously is very welcome, however, the sequencing of clearly defined steps and strategies are simultaneously necessary. CNI has also asked the participation of private sector in the process of drafting the laws and regulations.

It has also voiced for amending the existing Foreign Investment Prohibition Act-1964 and update the FERA Act to complement the process of allowing Nepali investors to invest abroad.

“In order to make the Nepali entrepreneurship competitive in the international market, it is imperative that the Nepali entrepreneurs be allowed to invest in foreign countries,” states the CNI release.

Allowing the private sector industries, companies and firms operating in Nepal to borrow from abroad without the prior approval of the Nepal Rastra Bank (NRB) is one initial step in the right direction. “To fuel growth in the business and industrial sector in the country, corporate bodies should also be allowed to raise financial resources from abroad through various equity and debt instruments in convertible currencies, states the release.

Besides, CNI has suggested that the Monetary Policy should incorporate policy to allow the Nepali companies to list in the stock exchanges in the neighbouring countries and their companies should also be allowed to be listed in Nepal Stock Exchange. It has also observed that Nepalis should also be allowed to invest in mutual funds in the neighbouring countries that are approved by NRB. This will help to productively utilise excess liquidity in the domestic markets to help create wealth even beyond the borders.