By Ajay Chhetri, Kathmandu, Oct. 26: The foreign direct investment (FDI) in the first two months of the current fiscal year (FY) has increased by 34 per cent in comparison to the same period of the previous FY.

A report "Current Macroeconomic and Financial Situation” of Nepal Rastra Bank (NRB) revealed that in the first two months of the current FY the FDI inflow has been raised to Rs. 3.2 billion. However, during the same period of the previous FY, the amount of the inflow had remained at Rs. 2.4 billion.

Deputy spokesperson of NRB, Narayan Prasad Pokhrel said the latest policies to encourage foreign investors are the reasons for the increase in the inflow of foreign investment.

He referred to the "NRB Foreign Investment and Loan Management Bylaw 2078" which states that foreign investors do not need the approval of NRB to send money in Nepal once they have been approved by the foreign investment approving agency, they are only required to inform the NRB.

Similarly, the bylaw also provides for the foreign exchange facility for investors to repatriate returns of investment. Also, foreign investors are not required approval to reckon registration including initial study and preliminary operating cost as foreign investment, and also approval from NRB is not needed for this.

Pokhrel further added that the return on investment is highly lucrative in Nepal.   

The data showed that FDI stock has been up by Rs. 2.56 billion during the period between the beginning of the second month and the beginning to the third month of the first quarter. At the end of the first month of the current FY, the amount of inflow recorded Rs. 706.6 million, however at the end of the second month, the inflow accumulated to Rs. 3.2 billion.