Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The Nepal Rastra Bank (NRB) is set to issue a Rs 25 billion one-year ‘Nepal Rastra Bank Bond 2084’ on Thursday as part of its ongoing liquidity management operations in the banking system.
According to a notice issued by the NRB’s Monetary Management Department, the bond will be issued through an online competitive auction, with bids accepted until 3:00 pm. The interest rate will be determined through the auction process, allowing market participants to bid based on their desired yield.
The central bank said the bond will have a one-year maturity, with the principal scheduled to be repaid on July 4, 2027 (Asar 19, 2084 BS). Interest payments will be made on a semi-annual basis.
Under the auction guidelines, eligible participants can submit bids starting from a minimum of Rs 50 million, with additional bids required in multiples of Rs 50 million, up to the total issuance amount of Rs 25 billion.
Only licensed Class ‘A’, ‘B’ and ‘C’ banks and financial institutions recognized as counterparties by the Nepal Rastra Bank are eligible to participate in the auction.
The bonds will be allocated based on the interest rates accepted through the competitive bidding process.
NRB stated that the bonds will qualify as eligible collateral for borrowing from the central bank as well as from other banks and financial institutions, enhancing their liquidity value for investors.
The approved securities will be classified under the investment portfolios of participating institutions. Although the bonds will not qualify toward the Cash Reserve Ratio (CRR) requirement, they will be eligible for calculating the Statutory Liquidity Ratio (SLR) and the Net Liquid Assets (NLA) ratio, making them an important liquidity management instrument for the banking sector.
The issuance comes as the central bank continues to actively manage excess liquidity in Nepal’s banking system through monetary instruments. By issuing NRB bonds, the central bank absorbs surplus funds from commercial banks, helping maintain monetary stability and support the effective implementation of monetary policy.
The auction is expected to attract strong participation from commercial banks and financial institutions seeking secure short-term investment opportunities while managing their liquidity portfolios.
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