The Nepal Rastra Bank has made public the monetary policy for the current fiscal year 2080/81.

The Nepal Rastra Bank has made public the monetary policy for the current fiscal year 2080/81. According to the publicized monetary policy, the central bank will review the provisions related to share pledge loans, real estate loans, and higher purchase loans to address associated risks.

Additionally, the monetary policy emphasizes the implementation of recommendations from the study committee formed to study the issues and suggestions related to microfinance financial institutions.

The ongoing monetary policy also encourages the merger and acquisition of microfinance financial institutions by providing facilities and conveniences during the process until the Asar end.

Furthermore, the policy ensures the necessary revision in the interest rate on loan and deposit by maintaining the mandatory cash ratio and the statutory liquidity ratio.

According to the released monetary policy, "The policy aims to reduce the policy rate by 50 basis points, i.e., 5.5 percent, and maintain the bank rate at 7.5 percent while decreasing the interest rate on deposits by 0.5 basis points from the existing 5.75 percent to 5.25 percent."

The central bank has indicated that if the average interbank interest rate taken as the operating target is higher than the deposit collection rate, the second market operation and deposit collection rate will be lowered.

Moreover, the monetary policy maintains a stable interest rate spread for operations, setting it higher than the bank rate and lower than the deposit collection rate.

To make the interest rate corridor more effective, the central bank has made arrangements to provide a permanent liquidity facility at the lower limit of the interest rate corridor. The policy also ensures the necessary flexibility in the policy rate and over-night interest rate.

In order to create an effective interest rate corridor, the central bank has arranged for a permanent liquidity facility at the lower limit of the interest rate corridor. The existing mandatory cash ratio and statutory liquidity ratio for banks and financial institutions have been maintained as before.