Kathmandu, Jan. 28 -- The government is preparing to tighten the payment system and foreign currency expenses amid growing pressure on the country's foreign exchange reserves. A government panel formed last month to study the country's deteriorating balance of payments situation said that service trade and imports were the key reasons behind the depletion of Nepal's foreign currency reserves.

Multiple sources at the Finance Ministry said that plans were afoot to impose restrictions on payments for the import of services and luxury goods. Ministry official Ram Sharan Kharel said that the panel had recommended tightening the service trade and import substitution to address the balance of payments situation.

The Finance Ministry had formed...