Government to Mobilise Part of Forex Reserves as Sovereign Wealth Fund

Kathmandu — With the country currently holding a comfortable level of foreign exchange reserves, the government has adopted a policy of mobilising a certain percentage of that amount as a "sovereign wealth fund," Finance Minister Dr. Swarnim Wagle announced through the budget.

Wagle said a "Matribhumi (Motherland) Fund" will be established to invest in projects of strategic importance, such as maintaining at least three months' worth of fuel storage and setting up an AI factory.

To reduce the exchange-rate risk on projects funded by foreign loans or investment, he said arrangements have been made to provide hedging services at an appropriate premium from the upcoming fiscal year.

The Finance Minister also said the government will create a favourable economic environment so that the results of the first and second sovereign credit ratings show improvement. Nepal will be removed from the money-laundering "grey list" as soon as possible, he added.