Amid fast depleting foreign exchange reserves in Nepal, all eyes are now on the country's acting central bank governor– Neelam Dhungana Timilsina, who took charge last week. Timilsina, the first woman governor — albeit acting governor– of Nepal Rastra Bank, is an experienced banker. She has been serving as the deputy of the suspended governor Maha Prasad Adhikari. Adhikari was appointed as governor of the central bank in April, 2020 by former Nepalese Prime Minister KP Sharma Oli.

He was suspended last week by the government due to the deteriorating economic situation in the country and rising disagreements with Nepal’s Finance Minister Janardhan Sharma. The relationship between the two particularly nosedived in the last six months.

There were murmurs as well that Adhikari was still taking instructions from Oli and his team.

Timilsina has a rather tough job cut out. Her immediate attention will be on boosting the foreign exchange reserves and providing stability to the local currency, the Nepalese rupee. The Himalayan country’s gross foreign exchange reserves stood at $9.6 billion –enough for imports of just over six months.

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Hit by rising oil and commodity prices in the wake of the Russia-Ukraine conflict besides fast depleting foreign exchange reserves, Nepal has now announced restriction of imports of non-essential goods. These include cars, gold and cosmetics.

“For the acting governor, the challenges are many but most importantly, she will have to work towards bridge the gap between the finance ministry and Nepal Rastra Bank. While the central bank needs to maintain its independence, all mechanisms fir financial management should work in coordination for correcting the path of the economy,” Vijay Kant Karna, Nepal’s former Ambassador to Denmark and professor of Political Science, Tribhuvan University told India Narrative.

Karna however said that the flow of remittances has picked up. “The immediate focus for the government as well as the central bank is to fix the country’s economy,” he said.

While many analysts have started equating the situation in Sri Lanka with that of Nepal, Karna said that Kathmandu is far better placed at this juncture.

Sharma also said that the move to ban imports on luxury items was temporary. Kathmandu has also put a ban on the use of government agencies’ vehicles on public holidays.