Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB) is to bring a flexible monetary policy this year to support the government’s target of 7 per cent economic growth by mobilizing more than Rs 14 trillion invested capital in the banking system.
According to a source at the Nepal Rastra Bank, the draft of the monetary policy for the fiscal year 2083÷84 has reached the final stage. The management committee has already finalized the main points of the policy and after being approved by the board of directors, preparations are being made to make it public this evening or tomorrow morning.
The monetary policy this time will not include regulatory provisions related to banks and financial institutions. According to the sources, the NRB will amend such provision through separate directives as per the need, so only subjects related to monetary instruments and macroeconomic management will be given priority in the monetary policy.
At present, banks and financial institutions have more than Rs 14 trillion investable amount, but the demand for loans from the private sector has not increased as expected. Although interest rates have fallen to historically low levels, credit expansion has slowed and the economy has not been able to regain the expected momentum.
In view of this situation, the Nepal Rastra Bank is preparing to bring a flexible monetary policy with the objective of encouraging the flow of credit and facilitating the expansion of private sector investment. It is expected to stimulate economic activities by increasing investment in production, industry, trade and infrastructure.
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