Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari has informed that the central bank will issue monetary tools to help ease the financial problems created by the Covid-19 induced pandemic. “Lowering of bank interest rate has already been decided. Now banks will be allowed to capitalisation of interest on loans and increase their lending,” Adhikari said addressing a webinar titled ‘Global Webinar on Role of Professional Accountants in Business Continuity, Crisis Management and Financial Reporting: Post COVID - 19 Pandemic’ organised by the Institute of Chartered Accountants of Nepal (ICAN). He warned that it will be very challenging for businesses to resume their activities after the lockdown is lifted. Adhikari said that the growing number of coronavirus infected people in the recent days have added to the mounting economic challenges. According to him, the sharp contraction in domestic and international job markets has created big problems. “4.4 million people associated with informal sectors have been affected by the pandemic-induced crisis,” he said, adding that hotel, restaurants and the overall tourism sector are likely to face even bigger problems for the next 1-2 years.

He further warned that sharp fall in remittance inflow will hit areas ranging from liquidity in the banking system to aggregate consumer demand. “The outlook of external sector also looks bleak due to the declining remittance inflow,” he mentioned. The problem of unemployment will be severe as large number of Nepali migrant workers are likely to the country, according to Adhikari.

In his opening remark, ICAN President CA Krishna Prasad Acharya highlighted on the adverse effects of the Covid-19 pandemic on global economy. “Companies in the hospitality industry and SMEs will be among the hardest hit. Many businesses have been forced to reduce operations or shut down and an increasing number of people are expected to lose their jobs,” he said.

According to Acharya, the pandemic has also affected the profession of chartered accounting. “Professionals engaged in audit and assurance services face difficulties in implementing various standards while discharging their duties and many professionals in advisory services may lose their revenue due to this situation,’ he said, adding, “However, accounting professionals can play crucial role in curtailing cost cutting competition arising from this pandemic.”

The webinar was participated by presidents of International Federation of Accountants (IFAC), South Asian Federation of Accountants (SAFA), Institute of Chartered Accountants in England and Wales, Chartered Accountants Australia and New Zealand (CA ANZ), Institute of Chartered Accountants of India (ICAI), Vice President of Institute of Chartered Accountants of Bangladesh (ICAB), Executive Director of Confederation of Asian and Pacific Accountants (CAPA) and experts from CPA Australia and Sri Lanka.