Kathmandu, May 12: Nepal Rastra Bank (NRB) has reduced the bank rate by a percentage point. The central bank made this decrement through the third trimester review of the monetary policy for Fiscal Year 2022/23.
The Bank has retained the policy rate, but has reduced the existing bank rate by a percentage point to 7.5 percent. The rest of the rates under the interest rate corridor remain as they are, NRB said.
According to the Bank, some monetary provisions have been eased through the third trimester review of the monetary policy. It is stated that the future course of action of the monetary policy has been cautiously made somewhat flexible to support invigorating the domestic economic activities by maintaining the overall economic stability on the basis of the present situation and the possible scenario of inflation and foreign exchange reserves.
The inter-bank interest rate has decreased by 1.5 percentage points as NRB has made provision for providing the daily liquidity facility which it has been making available at 8.5 percent bank rate at present at the policy-wise rate at 7 percent from the half-yearly review.
The provision of providing the daily liquidity facility at the policy rate has been continued from the third quarterly review of the monetary policy.
NRB has given continuity till January 14, 2024 the existing arrangement allowing counting the bonds issued by banks and financial institutions to be calculated for the purpose of CD ratio as source deposit.
The Central Bank has also made some new provisions in connection with the refinancing through the monetary policy assessment. The refinance will be provided to the sectors whose growth rate is in the negative over the last six months.
Likewise, a provision has been brought by which the loan issued to hotel and restaurant, livestock farming, loan related to the construction sector and loans of up to Rs 50 million issued to other sectors would be restructured and re-tabulated within July 16, 2023.
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NRB Monetary policy review 2023
