KATHMANDU: The Nepal Rastra Bank (NRB), central bank of Nepal, is issuing a repurchase agreement (repo) worth Rs 30 billion. The bank is today issuing the repo for seven days after shortage of investment capital is seen in the banks and financial system.
NRB issues short term repo if there is liquidity shortage in the banking system. The commercial banks, development banks and financial institutions can buy the repo through tender. The repo will mature September 30.
Before this, NRB had provided the money through repo of Rs 20 billion for a period of seven days on September 2, of Rs 30 billion for a period of 14 days on September 9 and of Rs 20 billion for a period of one week on September 16.
Banks and financial institutions use the repo, inter-bank lending and the Standing Liquidity Facility (SLF) in case of liquidity crunch. It is found that banks and financial institutions are not getting the inter-bank lending due to the shortage of liquidity. They have been regularly taking SLF.
