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NRB to release its monetary policy review in next few days

KATHMANDU: The Nepal Rastra Bank (NRB) is scheduled to review the third quarter’s monetary policy by Wednesday, even as the government is putting together a plan to boost economic activity through the upcoming year’s budget.

The government, which has already sent a positive message by working with the Nepal Bankers Association to lower deposit interest rates, also hopes to make a statement through the central bank’s review of its monetary policy.

Speaking with the NRB about a loose monetary policy, according to Finance Minister Dr. Prakash Sharan Mahat. In order to influence the review that will be approved by the central bank’s board of directors, he has also replaced the finance secretary. A legal requirement states that the Finance Secretary is an ex-officio member of the NRB Board of Directors.

Finance Minister Dr. Mahat believes that with some help from the central bank, the market will run and the government’s public finances will improve even though there is a significant budget deficit.

He has appointed Dr. Gunakar Bhatta, the director of the department responsible for regulating banks and financial institutions, as an advisor in order to maintain the good working relationship between the Ministry of Finance and the NRB.

The review of monetary policy must address certain issues right away, according to the finance minister. According to sources, he expressed some of his wishes to NRB Governor Maha Prasad Adhikari in an open manner.

Members of the advisory group for the finance minister, Drs. Bishwo Paudel and Poshraj Pandey, also spoke with the governor about what the government expects.

“Some policy flexibility is what the government now desires. By doing that, there is no need to sacrifice financial stability, according to the source, and constant austerity is unnecessary. He asserts that if a few issues are addressed in the monetary policy review, which will be made public in a few days, the market’s spirits will be raised and the environment for investing will also be enhanced.

The banks’ liquidity is growing at the moment. Remittance income has also increased. The outside world is gaining strength. Interest rates have decreased. The right conditions, however, have not been established for investment. Bank loans are not needed at this time.

The source asserted, “This is due to low morale,” adding, “In the context that the data made public by the National Statistics Office has confirmed that the economy has shrunk due to low morale, NRB should play a positive role. “.

To get the economy moving right away, the construction industry needs to adopt some flexibility. When entrepreneurs are given access to loans, it is predicted that sectors like cement and steel rods will thrive as the government sector gradually opens up.

Similar to this, it is necessary to review the trading restrictions for institutional investors, particularly banks and financial institutions, by making a minor adjustment to the approach taken to the stock market.

The government desires assistance in loan and interest repayment for industrialists and small businesses that have invested in the productive sector. Additionally, Governor Adhikari has stated that he will be flexible on a few issues.

The complete ‘outline’ of the monetary policy, which will be made public in a few days, has been prepared by the NRB’s Economic Research Department.

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