The recommendation committee under finance minister Dr Ram Sharan Mahat had yesterday evening recommended three names – senior deputy governor Gopal Kafle, deputy governor Maha Prasad Adhikari and Prime Minister Sushil Koirala's economic advisor Nepal – for the prestigious post for next five years.
Nepal, who became the 16th governor of the central bank leaving behind a half dozen aspirants, is a liberal economist and holds post-graduate in labour relations economics from Banaras Hindu University.
Nepal will now replace outgoing governor Dr Yubaraj Khatiwada, who took his retirement from today after completing his five-year tenure. Nepal will, however, take charge from Sunday.
Some bankers, economists and former bureaucrats were also in the race for the highly-coveted post of the central bank governor even before the formation of the recommendations panel was formed by the cabinet, according to the Nepal Rastra Bank Act, on February 24.
The committee led by Mahat had the first governor of the central bank Himalaya Shumsher JB Rana and senior economist and former central bank board member Parthibeshwar Timilsina as members.
Earlier, newly appointed governor Nepal (52) was economic advisor to the Finance Ministry in the election government of Khila Raj Regmi. Likewise, he was also advisor to the Foreign Ministry, and chairman of the Securities Board of Nepal (SEBON) during 2007-2009 under the then Prime Miniter Girija Prasad Koirala.
He had worked with the private sector too as he was advisor to the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industires (CNI) and Nepal Chambers of Commerce (NCC) once upon a time.
According to the newly appointed governor Nepal, his top priority will be to give continuity to the fiscal stability measures introduced by his predecessor Khatiwada. However, it is not an easy cake for Nepal as Khatiwada is handing over a relatively stable financial sector. Second, will be to increase confidence of the public in the banking and financial system, he said, adding that handling foreign exchange reserves and balance of payments against the backdrop of a ballooning trade deficit and decreasing remittance inflow growth rate will be yet another challenge.
Likewise, capital flight through over-and-under invoicing and rerouting it back to the country as foreign investment, and fighting against the flow of black money are yet another challenges Nepal has to face in coming months.
His another challenge will be to strike better coordination among National Planning Commission, Finance Ministry and central bank. Central bank as the economic advisor to the government and planning commission as the policy think-tank of the government has to be on the same page for the better execution of the government policies for better output.
Similarly, the new governor has to build good rapport with the banks and financial institutions as they had love-hate relations with Khatiwada.