My money is much safer in the UK bank despite less interest and taxed. I am not gonna lend my money to the tyranny monarch and buy weapons to shoot Nepali brothers. What about you?
Govt to raise money through ?peace? bonds
KOL Report
KATHMANDU, April 20 - The government is planning to issue ?peace bonds? in order to prevent a possible financial crisis.
News reports Wednesday said that government bonds worth as much as Rs.5.5 billion could be issued. The government is looking to raise money from Nepalis, especially those abroad, and foreigners through these bonds. It would be the first time Nepal has issued government bonds in the international market.
The government has already started preparations to issue these bonds, said Finance Minister Madhukar Shumsher Rana. Kantipur daily quoted the minister as saying that a proposal for the ?peace bonds? had been distributed among the Cabinet members. Though the Cabinet has discussed it, no decision on the bonds has been taken yet, according to the Kantipur report.
By issuing these bonds, the government will in effect be borrowing money from whosoever buys the bonds. In return, the lender, i.e. the buyer of the bond, will get a specified interest rate that is paid either periodically during the life of the bond or when the bond ?matures? after a specified period of time. The buyer is paid back the principal amount, the money originally borrowed, when the bond matures. The government is planning to offer an interest rate of around six percent initially, according to reports. But no details as to the face value of the bonds or the maturity period are known as of now.
The plan to issue these bonds comes at a time when the government faces a looming financial crisis in the wake of suspension of aid by major international donors after Feb. 1. On of the most significant of these suspensions came in March when a World Bank loan worth more than Rs.5 billion was pulled. The same month the government in its mid-year budget review said that it expected mobilize around Rs.9 billion in foreign loans, down nearly Rs.8 billion from an initial target of Rs.16.95 billion. Estimates for grants?money the government does not have to pay back?were revised downwards by around Rs.2 billion as well. Thus the government faces a possible resource crunch this fiscal year because money committed earlier might be held back.
Governments the world over issue such bonds when they need to raise money. U.S. Treasury securities, issued by the United States, are the most popular government bonds and are considered by many as the most secure investments in the world. Foreign governments and individuals hold around half of the U.S. Treasury bonds issued to the public.
Such bonds are also issued by governments in times of trouble. Pakistan had resorted to such bonds after economic sanctions and restrictions on foreign assistance after its nuclear tests in 1998, said the Kantipur report.
The government is reportedly looking to raise money from the Nepali diaspora. The bonds are being targeted at both non-resident Nepalis and those working aboard. (yv)
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