Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal Rastra Bank (NRB) announced it will absorb NPR 60 billion in excess liquidity from the banking system through a deposit collection auction on Wednesday. The central bank has been actively managing liquidity since the start of the fiscal year 2024/25 due to surplus funds in the banking sector.
With total deposits exceeding NPR 7,058 billion, the NRB is resorting to its online bidding system to conduct the auction. The interest rate will be determined through the bidding process, with the principal and interest of the deposit collection instrument set to be repaid on August 3, 2025, according to the NRB.
Bids must range from a minimum of NPR 100 million to a maximum divisible by NPR 50 million, up to the total called amount.Only Class A, B, and C banks and financial institutions licensed by the NRB are eligible to participate in the auction.
While the NRB typically calls for 21-day deposit auctions, it has recently shifted to longer durations to manage excess liquidity in the market.This move reflects the central bank’s ongoing efforts to stabilize the financial system amid rising deposits, ensuring balanced liquidity to support economic stability.
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