Monetary policy adjustments: Nepal Rastra Bank implements rate reductions

KATHMANDU: The Nepal Rastra Bank has introduced a more adaptable monetary policy framework. In its first-quarter review of the fiscal year 2023-24’s monetary policy, released on Friday, the central bank announced reductions in both the policy rate and the bank rate.

The bank rate has been lowered from 7.5 percent to 7 percent, while the policy rate sees a decrease from 6.5 percent to 5.5 percent.

Additionally, the deposit collection rate has been adjusted from 4.5 percent to 3.0 percent, as reported by the Rastra Bank. The mandatory cash ratio and statutory liquidity ratio remain unchanged.

The central bank cites a flexible monetary policy stance, considering an analysis of factors influencing current inflation, the prevailing economic conditions, and the growth rate of bank loans to the private sector.