Nepal agrees to invest in Chinese govt securities

Nepal's central bank, Nepal Rastra Bank (NRB), inked a memorandum of understanding (MoU) with its Chinese counterpart, the People's Bank of China (PBOC), over the weekend, according to which the NRB will invest in securities issued by the Chinese government.

Visiting Deputy Governor of the PBC Hu Xiaolian and Deputy Governor of the NRB Gopal Kaphle signed the MoU Friday titled "Agency Agreement on Investment in Interbank Bond Markets of China" at a function organized by Nepal Rastra Bank, said Bhaskarmani Gynwali, a spokesperson for the NRB.

"The NRB, with the aim of diversifying its investment in foreign exchange reserves, has signed the MoU with the PBC and this is the beginning of Nepal-China banking relations at a new level," NRB Governor Yubaraj Khatiwada said at the function.

The NRB governor urged China to expand banking connections between Nepal and China, as well as formalizing trade via payment through banking channels.

He also pointed out the need for a currency swap arrangement between China and Nepal to further facilitate trade relations.

After the MoU signed on Friday, the NRB will open a Chinese currency account at the PBC, through which it will invest in Chinese debentures, treasury bills, bonds and other governmental securities.