Policies on foreign exchange and balance of payments: An assesment of the background for their effective uses in the Nepalese context
The world economy today has a unique property of being so integrated that no nation is independent in settling its philosophical framework in relation with economic reforms and transformations. A consistent country specific policy package nevertheless, may be deduced based on certain specific working assumptions determined by national parameters which, in turn, reflect divergent socio-economic behaviours specific to the country under consideration. These parameters are either the manifestations of the degree of social change, the pattern of geographical, physical and demographic structure, or the socio-economic milieu. Group efforts at the international level however, always exist for a unique world order evolving out of desire to achieve a common goal, say, a certain standard of social living.
This paper raises the question of international monetary reform during the decades following 1944, when a mutual understanding was reached internationally for an orderly arrangement of exchange relationships. The intent is to assess various policy approaches that have been initiated to overcome constraints of international reserve assets found in Nepal and elsewhere. The central focus is the policy problems facing Nepal, arising from the imbalances in Nepal's international account, the Nepalese style of tackling these problems and some specific but pertinent generalisations with their policy implications.