How will hedging facility be regulated and who will be eligible for this facility? NRB publishes laws relating to hedging

Nepal Rastra Bank (NRB) has published laws and regulations related to hedging facility. Projects having foreign debt investment will be allowed to use the hedging facility.

The hedging facility will be available to the following projects- Hydropower projects with output of 100 MW or more, transmission line greater than 30 km and 220 KVA, rail longer than 10 km, monorail construction and other projects as per the government.

To protect the investment in the project from fluctuation of foreign exchange rates, the hedging laws have been introduced.

The hedging fee will be based on factors like foreign exchange risk, money inflation risk, investment in project, amount of debt, period of retuning the debt and the environment of the project etc. With the mutual agreement of the related ministry of the project, bank and the investor, the hedging fee will be decided.

For other details, look at the notice published by NRB: