NRB lowered bank rate through monetary review

KATHMANDU: Through the third review of the monetary policy for the current fiscal year, Nepal Rastra Bank lowered the bank rate by one percentage point. The bank rate, which was formerly fixed at 8.5 percent, has now decreased to 7.5 percent.

The bank rate is the interest rate that the central bank assesses on loans given to banks and other financial institutions that are secured by government securities.

The current policy rate, which remains at 7 percent, has not changed. The NRB has made arrangements to offer the daily liquidity facility at the bank rate of 8.5 percent through a half-yearly review at the policy rate of seven percent. This facility has been maintained by The National Bank through the third review.

According to the National Bank, this has caused the interbank interest rate to drop by 1.5 percentage points. The National Bank has also asserted that improvements in liquidity and interest rates will support the continuation of economic activity in the days ahead, taking into account the current size of loans from banks and financial institutions, the capital adequacy situation, the improvement of the external sector, and the scenario of financial resource mobilization.