KATHMANDU, July 23: Nepal Rastra Bank (NRB) is all set to unveil the monetary policy for the current fiscal year 2023/24 today.
According to sources, Governor Maha Prasad Adhikari is preparing to unveil the monetary policy after a board meeting of the central bank. The NRB has said that they plan to focus on flexibility in monetary instruments to maintain the reforms in the external sector in the new monetary policy.
NRB announcing new monetary policy today
Officials at the NRB say that by keeping the Cash Reserve Ratio (CRR) unchanged at 4 percent, the rates under the interest rate corridor, including the policy rate, can be reduced in view of the falling inflation.
Even though the NRB has loosened the monetary policy to make the weak economy a little more viable, it is not in favor of extending loans to the private sector at a high rate. In view of the declining credit quality, the officials of NRB have been saying that recovery should be done rather than credit expansion.
Sources claim that the monetary policy may target the expansion of loans to the private sector to be close to 10 percent.
The International Monetary Fund (IMF) mission had a discussion with Governor Adhikari on monetary policy only last Friday. Sources claim that the IMF has discussed the issue of Extended Credit Facility (ECF), but the sources have insisted that the monetary policy should be flexible in the discussion and not take a policy that would increase the pressure on the external sector.
