NRB expected to issue Monetary Policy today

KATHMANDU: The Nepal Rastra Bank is issuing the Monetary Policy for Fiscal Year, 2023/24 in line with the budget policy most probably today.

Preparations are underway to bring the monetary policy this week, Governor Maha Prasad Adhikari today said.

The monetary policy would focus on achieving economic growth as per the budget target, controlling inflation and managing the external sector, he said.

Although there are some positive economic indicators like the balanced external sector, decreasing interest rates and adequacy of liquidity, some problems like inflation, deficit reserve fund and sluggish credit expansion still persist, he said.

“The permissible limit of inflation for the previous FY was seven percent, and it remains above that this FY. The reserve fund is in a deficit of Rs 193 billion. The credit expansion has decreased despite good deposit collection,” he said.

The external sector seems to facilitate as compared to the previous year, he said.

“Now, there is liquidity worth Rs 88.5 billion in the banking system. The current accounts suffer a deficit of Rs 70 billion, and there were difficulties to recover loans due to the market slowdown,” he said.

Until June 15, 2023, a total of 147,510 people took concessional loans, he said.

The Central Bank would take an appropriate decision in finding ways to balance the country’s economy, he added.

According to the Nepal Rastra Bank, the interest and base rates of loans and deposits are decreasing, and the CD ratio has dropped to 82 percent.

The government has set a target of keeping inflation within the permissible limit of 6.50 percent in the current FY, and the monetary instruments would be mobilized accordingly, it said.