Kathmandu, November 15, 2006

The government and the Maoist talks teams today discussed their drafts of the Comprehensive National Peace Treaty with the objective of giving final touches to it.

According to the November 8 agreement reached between the seven-party alliance and the CPN-Maoist, Prime Minister Girija Prasad Koirala and Maoist chairman Prachanda will sign the peace treaty tomorrow.

Leaders of the talks teams told media persons today they would be able to finalise the draft of the peace treaty on time. They said the PM and Maoist supreme will sign the treaty tomorrow.

Emerging from the meeting held at Hotel Himalaya, Home Minister and convener of the Government talks team Krishna Prasad Sitaula and Minister for Civil Aviation, Tourism and Culture Pradip Gyawali said both the talks teams would sit together again tomorrow morning and finalise the treaty.

“The PM and Prachanda will sign the peace treaty tomorrow,” Sitaula said. Maoist leader Dr Baburam Bhattarai and PM’s close aide Dr Shekhar Koirala were also present during the meeting that lasted around nine hours.

Gyawali said the decade-old conflict will come to an end once the peace treaty is signed by the government and the Maoists. “Nobody will have to raise arms for political causes once the treaty is signed.”

Maoist talks team member Dev Gurung said they were trying to finalise the treaty keeping in mind the deadline set by the November agreement.

Buying IC with dollars

Due to increased trade deficit and decreasing inflow of remittances, the Indian Currency (IC) reserve at the Nepal Rastra Bank (NRB) is declining at a fast pace for the last couple of months.

As a result, the central bank purchased IC worth a whopping $90 million last month from Reserve Bank of India, and is preparing to buy an additional IC worth $100 million soon, said a highly placed NRB source.

Earlier, the central bank used to purchase IC once a year or so.

According to him, the total IC reserve in the Nepali banking system is estimated at one billion Indian rupees only.

“This is probably the first time that NRB bought IC worth $90 million within 28 days.

The central bank had bought IC equivalent to $50 million for about an entire year some two years back,” said Ramjee Regmi, executive director at NRB Foreign Exchange Management Department.

He further stated that though purchase of IC by paying US dollars is not a problem, it is good to have a surplus reserve of IC in the treasury because of Nepal’s ‘widely- dependent’ trade relations with India.

The IC reserve used to be in the surplus when the trade balance between the two countries was stable, and India used to import gold via Nepal as well as the remittances from third countries used to enter Nepal via India.

All these were stable sources of the Indian currency apart from remittances by thousands of Nepali.