Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The Nepal Rastra Bank (NRB) has announced plans to absorb Rs 90 billion in liquidity from the financial system through a short-term deposit collection auction. The central bank made the move after an excessive accumulation of loanable funds in banks and financial institutions due to sluggish credit demand.
According to the NRB, the deposit collection will be conducted for a 42-day tenure, with commercial banks and financial institutions invited to submit proposals via the online bidding system by 3 p.m. on Sunday.
The central bank has set a minimum bid amount of Rs 1 billion (Rs 100 million) per institution. The interest rate will be determined through competitive bidding, in line with the NRB’s open market operations framework. The principal and interest payments are scheduled to be made on Mangsir 21, 2082 (December 6, 2025).
This liquidity absorption measure comes as banks have been struggling to deploy their excess funds amid weak credit demand in the private sector. The NRB has been continuously conducting liquidity mop-up operations in recent months to manage money supply and maintain financial stability.
Currently, the lower limit of the interest rate corridor stands at 2.85 percent, providing a floor for short-term market rates. By withdrawing excess liquidity, the NRB aims to stabilize interbank rates and keep inflation and credit expansion within its monetary policy targets.
The move reflects the central bank’s proactive stance in balancing liquidity and maintaining monetary discipline in the face of limited investment appetite and subdued economic activity.
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