Nepal has prohibited imported booze, playing cards, and nearly a dozen other “non-essential” items to solve the Himalayan country’s rising trade deficit and dwindling foreign currency reserves, according to officials.

Falling remittances and tourism earnings, combined with a blowout budget deficit, have severely dented Nepal’s fiscal position during the Covid-19 pandemic.

The central bank has said reserves are only sufficient to cover just over six months of imports, down from 10 months in mid-2021.

A commerce ministry directive on Tuesday announced prohibitions on the import of several items including diamonds, large televisions, expensive mobile phones and tobacco until July.

“This is a short-term measure taken to prevent the economic condition of the country from going bad,” ministry joint secretary Narayan Prasad Regmi told AFP.

“The government has decided to curb imports of certain luxurious and non-essential goods as the recent surge in imports has put pressure on our economy.”

The central bank had already verbally directed private lenders not to issue letters of credit for luxury goods earlier in April.

Nepal’s trade deficit rose by nearly 34.5 percent on-year to $9.35 billion in mid-March, while forex reserves have fallen below $10 billion.

Petroleum tops its list of imports, with Nepal spending $1.54 billion between July last year to March 2022.

The import ban is aimed at pre-empting the situation now faced by regional neighbour Sri Lanka, which is enduring its worst economic crisis in decades after running out of foreign exchange to pay for imports.

The South Asian island nation has suffered months of lengthy blackouts and acute shortages of food, fuel and pharmaceuticals, with angry protests demanding the government’s resignation.

Economist Kalpana Khanal said Nepal’s import restrictions were a good “short-term measure” to shore up the country’s fiscal position.

“However, the government should prioritise long-term measures to boost foreign investment and export earnings,” she added.