With Sri Lanka already bewildered in its worst financial crisis since independence in 1948, another South Asian nation -- Nepal -- appears to be heading for the same debacle.
Like Sri Lanka, Nepal is also heavily dependent on tourism and the export of limited commodities for foreign exchange reserves that the country needs to meet its import expenditure.
As in the island nation, Nepal’s tourism sector was shocked by the Covid-19 pandemic. Tourism showed signs of recovery in both the countries but the outbreak of the Russia-Ukraine war disturbed the economic equations in both the countries once again.
The Himalayan country also relies heavily on imports, with the list mostly covering petroleum, food, sugar, lentils, medicines and transportation equipment, among other essential items.
If the country fails to maintain its foreign currency reserve, there could be a liquidity crisis which often leads to an economic crisis, experts say.
The Saarc nation has recently restricted imports of non-essential goods - including cars, cosmetics and gold - after its foreign currency reserves dropped.
Nepal's gross foreign exchange reserves decreased by 16.2% to Rs1.17 trillion in mid-February 2022 from Rs1.39 trillion in mid-July 2021, according to The Kathmandu Post.
Sri Lanka saw a staggering 70% drop in foreign exchange reserves since January 2020, whereas the figure for Nepal fell by more than 16% to 1.17trillion Nepali rupees ($9.59billion) in the seven months to the middle of February.
Over the same period, the amount of money sent to Nepal by people working abroad fell by almost 5%.
Interestingly, this is happening when Sri Lanka urged its citizens overseas to send home money to help pay for desperately needed food and fuel after announcing a default on its $51 billion foreign debt on Tuesday.
Weighed on the situation is the political crisis in Nepal which started escalating last year, leading to the economic crisis.
The governor of the country's central bank -- Nepal Rastra Bank -- was removed from his role last week.
In what appears to be an interesting take, Nepal's finance minister, however, said he was "surprised" the issue was being compared with the crisis in Sri Lanka.
Narayan Prasad Pokharel, deputy spokesperson at the central bank, told the Reuters news agency that the institution believed the country's foreign currency reserves were "under pressure".
"Something must be done to restrict the import of non-essential goods, without affecting the supply of essential goods," Pokharel said.
He added that importers were allowed to bring in 50 "luxurious goods" if they paid for them in full.
"This is not banning the imports but discouraging them," Pokharel said.
Government debt in Nepal has risen to more than 43% of its gross domestic product (GDP), as officials increased spending to help cushion the economic impact of pandemic, Nepal's Finance Ministry said on Monday.
Nepal’s GDP was Rs4.26 trillion in the last fiscal year 2020-21 ended mid-July 2021.
The ministry also said indicators of the country's economic health were "normal".
"However, due to some pressures in the external sector, some steps have already been taken to manage imports and increase foreign exchange reserve," it said in a statement.
Earlier in the day, finance minister Janardan Sharma said Nepal's debt was lower than other countries in the region and elsewhere.
Alex Holmes, an emerging markets economist, told the BBC that the situation in Nepal appears "much better than in Sri Lanka".
Nepal's foreign currency reserves are double what is considered "a comfortable minimum" and government debt "is not particularly high", Holmes said.
"Of course, things will eventually regress if the current account deficit does not narrow," he added.
But Nepalese economist Min Bahadur Shrestha said: “The country is already in a ‘first level’ crisis.
“If the government fails to manage things properly, the economic crisis could deepen,” he feared.