First Business News Portal in English from Nepal
KATHMANDU: The Nepal Rastra Bank (NRB) has decided to raise Rs 50 billion from the market at a time when excessive liquidity in the financial system is likely to bring down interest rate on deposits further.
As per NRB, Rs 50 billion will be collected from the market (banks and financial institutions) for 28 days and interest rate of such deposits collected by the central bank will be fixed through auction.
Earlier, NRB had withdrawn Rs 21.8 billion from the market. Despite this, the financial system still has Rs 161 billion excessive liquidity. After raising Rs 50 billion today, liquidity in the market will come to around Rs 110 billion.
“With excessive liquidity in the market, interest rate on deposit/saving is under pressure. We are colecting Rs 50 billion at once from the market to ensure that interest rate on savings does not fall further,” informed Gunakar Bhatta, spokesperson of NRB.
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