Crippled by the recent 19-day long strike called by the Seven Party Alliance and inept economic management, a liquidity crisis is looming large in Nepal, an official from central bank said in Kathmandu Tuesday.

The government is facing a cash-crunch of over 3 billion Nepali rupees (42.8 million U.S. dollars) at the close of April, revealed the source at the Nepal Rastra Bank (NRB), the central bank of the country.

Various sources of revenue have gone dry in recent days leading to the paucity of cash in the national treasury.

Keshav Acharya, chief at the Research Department of NRB, commenting on Nepal's liquidity crisis said, "It is likely that the nation may face liquidity crisis soon."

The new government must work on a war-footing to mobilize national revenues to keep the economy afloat, Acharya suggested.

During the strike on April 6-24, revenue generating sources across the country such as customs points came to a complete halt that has hit the national treasury hard, Acharya said.

Other officials at NRB, on conditions of anonymity, disclosed that current cash reserve at the national treasury stands at 7 billion rupees (100 million dollars) only.

For over 20 days, especially during curfews and the general strike, taxpayers did not pay taxes which has primarily created the revenue crisis, according to government officials.

According to the ministry of finance (MoF), the government had targets to collect 82 billion rupees (1.17 billion dollars) revenue during this fiscal year.

However, only 46 billion rupees (657 million dollars) has so far been collected.

MoF officials said, the government is likely to suffer a shortfall of close to 20 billion rupees (285.7 million dollars) even if the current trend of revenue growth improves in the current fiscal year which ends in less than two months.

Source: Xinhua