Monetary Policy for current FY presented

KATHMANDU, JULY 26 :  Nepal Rastra Bank (NRB) has made public the Monetary Policy for the fiscal year 2024/2025.  While presenting it during a program held today in the capital, Governor Maha Prasad Adhikari said that the policy rate has been reduced from 5.5 percent to 5 percent.

Similarly, the bank rate has been reduced from 7 percent to 6.5 percent.  The lower limit of the deposit collection rate remains unchanged at 3 percent.

In the policy, a credit expansion target of 12.5 percent is set for the current fiscal year compared to the same of 11 percent if the last year.  Of 11 percent, only 50 percent was accomplished.

While announcing the monetary policy of the current FY, Adhikari informed that the prevalent maximum loan limit of Rs 200 million for margin lending to institutional investors primarily focused on capital market investments will be annulled.  According to him, a new asset management company will also be commenced in order to effectively manage non-banking assets and non-performing assets of banks and financial institutions.

The policy has a provision of the extension of the interest payment period for loans floated to construction businesses till mid-December 2024.  According to it, no any such businesses will not be blacklisted owing solely to check dishonor, unless specified otherwise by credit notification provisions. . 

 Similarly, it talks about developing the design characteristics of a wholesale Central Bank Digital Currency (CBDC). Ensuring the necessary infrastructure and institutional framework to fully operationalize the National Payment Switch is also promised by the policy.