NRB hints loose monetary policy for fiscal year 2023–2024

KATHMANDU: The Nepal Rastra Bank (NRB) has suggested that a loose monetary policy will be implemented for the upcoming fiscal year. During a conversation held in Birgunj, NRB Governor Maha Prasad Adhikari expressed this.

Adhikari, who previously faced criticism from the Ministry of Finance for implementing a strict monetary policy, is now in favor of a strategy that would benefit everyone. The business community has voiced its displeasure, claiming that the policies implemented under his direction have slowed down trade, industry, and market activity.

Adhikari stated that the budget for the fiscal year 2023–2024 is intended to implement a monetary policy that will result in a six percent economic growth rate.

In order to target economic growth and ensure that it addresses all areas of concern, he said, “We will design the monetary policy.”.

The third week of July is when the monetary policy is expected to be prepared, according to Governor Adhikari. He emphasized that the strict monetary policy of the past has helped to increase the nation’s foreign exchange reserves during a discussion held by NRB’s Birgunj branch to get feedback on the current economic and banking activities.

He emphasized that his goal is to improve the credit system rather than to trouble entrepreneurs and that the current capital loan guidelines of 2079 BS, which the central bank had introduced, are crucial.

He gave the assurance that NRB is constantly ready to work constructively with the private sector.

The lack of efficiency displayed by commercial banks, which fell short of expectations, was another area where the governor expressed his displeasure.

The Federation of Nepalese Chambers of Commerce and Industry’s chairman of the trade committee, Dr. Subodh Kumar Gupta, also expressed concern about the rising cost of capital brought on by high loan interest rates, which is encouraging illegal imports in border regions.

Even if it means lowering interest rates on institutional deposits, he advocated reducing the cost of interest on loans.

Similar demands were made by Anil Kumar Agarwal, president of the Birgunj Chamber of Commerce and Industry.

The participants also bemoaned the fact that farmers and common people were forced to pay higher interest rates to cooperatives and microfinance firms because commercial banks were reluctant to grant loans readily.