Kathmandu, July 20: The Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari said that the monetary policy for the current fiscal year, 2023/24 will be issued in line with the budget policy and programme.
The monetary policy will focus on achieving the economic growth as per the budget target, controlling inflation and managing external sector, he said while attending the meeting of the Finance Committee under the Federal House of Representatives.
Although there are some positive economic indicators like the balanced external sector, decreasing interest rates and enough liquidity, some problems like inflation, deficit reserve fund and sluggish loan 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 loss of Rs 193 billion. The loan expansion has decreased despite good deposit collection,” he said. The external sector seems facilitating 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 loss of Rs 70 billion, and there were difficulties to recover loans due to the market slowdown,” he said.
According to the Rastra Bank, the interest and base rates of loans and depositions are decreasing, and the CD ratio has dropped to 82 percent.
Earlier, Finance Minister Dr Prakash Sharan Mahat has repeatedly been requesting NRB to dwell on possibility of addressing economic crisis of the country, particularly on moving financial activities through private sector.
