NRB to draw 175 billion from market to manage liquidity

Kathmandu November 1- Central bank to issue long- term bond in order to control excess liquidity. NRB aims to provide long term solution to control excess liquidity through the issuance of bond named 'Nepal Rastra Bank Bond'. NRB has been issuing different kinds of short term tools to manage liquidity.

Due to the ineffectiveness of those tool, NRB is doing required homework of issuing bond said Dr. Min Bahadur Shrestha Chief of Loan Management Division of      NRB. It is said that the preparation of homework is in last phase which is expected to finalize soon. He added that long term liquidity management is carried out in order to control inflation in market to keep interest rate in required level.  

In this situation, when government has not issued any tool for investment, deposits of banks and financial institutions are continuously increasing, whereas loan and advances have not increased in the same ratio, long term liquidity management is needed, thus, NRB is issuing long term bond whose period shall be 6 months to 1 year. Source: Naya Patrika