Foreign Exchange Reserves

1. The Bank shall manage the foreign exchange reserves. These reserves shall be held in foreign currencies and include the following assets:
   (a) Gold and other precious metals deposited with the Bank or held in its accounts.
   (b) Foreign currencies deposited with the Bank or held in its accounts.
   (c) Foreign currencies held in the name of the Bank with foreign central banks or other foreign banks.
   (d) Special Drawing Rights (SDRs) deposited in the name of the Bank with international monetary institutions.
   (e) Bills of exchange, promissory notes, treasury bills, bonds, or other debt securities issued by any borrower or liable party, payable in foreign currency and held by the Bank.
   (As amended up to the end of Chaitra 2081 B.S.)
   (f) Agreements made with foreign banks, international financial institutions, or other parties, under which the Bank is to receive payments in foreign currency, either immediately or under repurchase arrangements.

2. While selecting the assets listed above, the Bank shall consider the safety of its capital and liquidity and aim to earn the highest possible return.

3. To implement monetary and foreign exchange policies effectively, the Bank shall maintain enough international reserves to make timely payments in international transactions.

4. If the Bank finds that international reserves have decreased or are likely to decrease to a level that could affect monetary or foreign exchange operations or international payments, it shall report to the Government of Nepal. The report shall mention the current reserve position, reasons for the decline, and the measures to prevent it.

5. Until the situation improves, the Bank shall prepare and submit additional reports with necessary recommendations to the Government of Nepal.

6. The Bank shall show the foreign exchange reserves mentioned above in its balance sheet.

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