NRB revises annual inflation target to 9.5%

Kathmandu February 29- Nepal Rastra Bank has revised the inflation target for this fiscal to 9.5%, as supply disruptions along Nepal-India border points pushed up consumer prices beyond the level predicted earlier. Launching the annual Monetary Policy in July, the central bank had said inflation would be contained at an average of 8.5 per cent in the fiscal year.

But after supply system was disrupted by blockade at the border points, prices of almost everything went up, with inflation hovering around 12.1 per cent in January. This has compelled NRB to revise the target upwards.

Another reason that is likely to create inflationary pressure this fiscal year is rise in money supply. Earlier, the central bank had predicted money supply to increase by 18 per cent. But because of rise in flow of remittance income and foreign loans and grants, money supply is expected to go up by 21.5 per cent in the current fiscal year.