Monetary Policy for FY 2023-24 sets 7 targets

The Monetary Policy for the current fiscal year 2023-34 unveiled by the Nepal Rastra Bank today has set seven various targets.

The structure and targets of the new Monetary Policy seek to maintain the foreign exchange reserve at a level sufficient to cover the anticipated imports of goods and services at least for seven months.

The Monetary Policy has determined its policy rates being based on the capacity of the foreign exchange reserves to cover imports and the target annual inflation rate. Additionally, the exchange rate of the Nepalese currency against the Indian currency has been maintained as it is.

It targets to keep interbank interest rates within the interest corridor by operating and promoting open market operations based on the position of the operating target. Similarly, it has set a target of limiting the inflation at 6.5 percent by preventing a pressure on prices by the monetary expansion.

The Central Bank has accorded priority to shift the fiscal resources to the productive sector in line with the target of achieving six percent economic growth set by the budget for the current fiscal year.

The broad money supply is expected to increase by 12.5 percent and credit to the private sector from banks and financial institutions is likely to go up by 11.5 percent in the current fiscal year.