Nepal Rastra Bank Revises Foreign Exchange Facility for Silver Imports

29th December 2025, Kathmandu

In a strategic effort to streamline the import of precious metals while maintaining a disciplined approach to foreign currency management, Nepal Rastra Bank has officially revised the exchange facility for silver. The central bank has introduced a new monthly quota system, replacing the previous framework that was based on per transaction limits.

NRB Foreign Exchange Facility

This significant policy shift was implemented through an amendment to the Integrated Circular 2081 and is designed to provide greater operational flexibility to both industrial users and commercial traders. By moving away from transaction based caps to a consolidated monthly ceiling, the central bank aims to reduce the administrative burden on the banking sector and simplify the procurement process for the domestic jewelry and manufacturing industries.

NEW MONTHLY QUOTA LIMITS FOR INDUSTRIES AND TRADERS

The revised provision establishes clear financial boundaries for different categories of importers. Under the new guidelines, industrial entities that require silver as a raw material for production are now eligible to access foreign exchange facilities of up to 2 million dollars per month. On the other hand, commercial traders and non-industrial businesses involved in the silver trade are entitled to a monthly foreign exchange facility of up to 400,000 dollars. This differentiation recognizes the higher volume requirements of manufacturing units compared to retail or wholesale traders, ensuring that industrial production remains uninterrupted by financial bottlenecks.

TRANSITION FROM TRANSACTION-BASED TO MONTHLY CEILINGS

Before this recent amendment, the silver import landscape was governed by limits applied to each individual transaction. Industries were restricted to 500,000 dollars per transaction, while traders were limited to 100,000 dollars. Although there was no specific monthly cap under the old system, the requirement to seek approval for every single transaction created significant procedural delays. Importers were often forced to submit repetitive documentation and undergo multiple approval cycles within a single month. The new monthly quota system allows businesses to consolidate their requirements, significantly improving efficiency and allowing for better long term planning of inventory and production schedules.

STREAMLINING ADMINISTRATIVE AND BANKING PROCEDURES

One of the primary goals of the Nepal Rastra Bank in implementing this change is to reduce the procedural burden on the commercial banking system. By allowing importers to handle their foreign exchange needs on a monthly basis rather than per transaction, the volume of paperwork is expected to decrease substantially. This consolidation benefits the Foreign Exchange Management Department and commercial banks by allowing them to process fewer but larger requests. It also provides banks with a clearer forecast of monthly foreign exchange demand, which is essential for managing national liquidity and maintaining the stability of external sector indicators.

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SUPPORTING THE JEWELRY AND PROCESSING SECTORS

Silver serves as a critical raw material for Nepal’s vibrant jewelry manufacturing and handicraft sectors. These industries are major contributors to domestic employment and have significant potential for export. Central bank officials have noted that the policy adjustment is intended to facilitate the legitimate needs of these sectors. By ensuring that manufacturers have timely and sufficient access to 2 million dollars worth of foreign exchange every month, the bank is supporting the continuity of industrial activity. This move is expected to stabilize the supply of silver in the domestic market, preventing artificial shortages that can arise from administrative delays in the import cycle.

MAINTAINING DISCIPLINE IN FOREIGN CURRENCY UTILIZATION

While the new system offers more flexibility, Nepal Rastra Bank has emphasized that it does not mean a relaxation of regulatory oversight. The central bank remains committed to prudent foreign exchange management. The monthly ceilings are specifically designed to discourage speculative hoarding or excessive import activity that could put undue pressure on the country’s foreign currency reserves. Commercial banks have been strictly instructed to verify the authenticity of every import transaction. They must ensure that the silver is being imported for genuine commercial or industrial use and that all reporting requirements under the Foreign Exchange Regulation Act are met with full transparency.

MARKET REACTION AND OPERATIONAL PREDICTABILITY

The response from market participants has been largely positive. Importers and jewelry associations have welcomed the move, noting that it provides much-needed predictability for their business operations. Previously, the uncertainty of multiple approval cycles often led to fluctuations in the availability of raw materials. The 400,000 dollar monthly limit for traders and the much larger 2 million dollar limit for industries provide a clear framework within which businesses can operate. This regulatory clarity is expected to foster a more stable trading environment, allowing businesses to focus on growth and quality rather than navigating complex and repetitive administrative hurdles.

CONCLUSION AND IMPACT ON EXTERNAL SECTOR STABILITY

In conclusion, the introduction of a monthly quota-based foreign exchange facility for silver imports represents a significant and practical refinement of Nepal’s monetary policy. By setting logical monthly limits of 2 million dollars for industries and 400,000 dollars for traders, Nepal Rastra Bank has successfully balanced the need for industrial facilitation with the necessity of foreign exchange discipline. This move strengthens the overall governance of the import sector and ensures that the domestic market is adequately supplied with essential raw materials. As the central bank continues to monitor global economic trends, such proactive policy adjustments will remain vital for the long term stability of Nepal’s financial system.

For More: NRB Foreign Exchange Facility