Capital Flight..

You don’t have to be a rocket scientist /PHD in economics to figure out why capital flight is taking place, there are three main causes for the capital flight - political instability, high inflation and a search for increase return on one’s investment. With never ending national political drama and high inflation rate (more than banks deposit rate), Investors started looking for investment opportunity that is not coupled /correlated with the nation politics. At the mean time When Nepalese investor did not see any hope in the domestic economy, what was happening in the emerging markets (especially India and other emerging Asian nation) was that they were raising fast from the ruble of the disastrous economic crisis, with the buttress of huge fiscal stimulus package and high flow of foreign institutional investment. Like any prudent investor, what investor here in the country started doing was investment in India, those who were not challening there fund to India, where buying gold. Gold often consider as a headge against inflation and as an alternative to depreciating USD. Until and unless we do not make our nation stable political and economically ,I don’t think any tools employed by the government or the central bank can stop capital flight, when there is immense opportunities at the next door neighbor ,where you do not have to knock the door ( open boarder) .