The Nepal Rastra Bank has announced its current fiscal year's monetary policy for 2080/81.
The Nepal Rastra Bank has announced its current fiscal year's monetary policy for 2080/81. Various targets have been set in the monetary policy, including ensuring foreign exchange reserves by curbing imports of goods and services for at least seven months.
The Central Bank has introduced arrangements to facilitate foreign exchange reserves in the monetary policy for the current fiscal year. The policy also sets the interest rates based on the capacity for imports and the annual targeted inflation rate.
The Nepali currency will be pegged against the Indian currency at a stable exchange rate, as indicated by the monetary policy, to maintain stability in the exchange rate with the Indian currency.
The average interest rate on interbank transactions of banks and financial institutions has been maintained as per the operational target. The monetary policy aims to actively conduct open market operations to keep the interbank interest rate within the corridor.
To control inflation within a range of 5 percent, monetary management from an expansionary approach is maintained, avoiding excessive money printing from the monetary expansion.
The government's annual budget speech has supported achieving 6 percent economic growth as targeted, and the central bank has prioritized channeling financial resources towards the productive sector to achieve this goal.
Moreover, the current monetary policy has increased the statutory liquidity ratio to 12.5 percent and the credit to the private sector from banks and financial institutions will grow by up to 11.5 percent.
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