The Nepal Rastra Bank (NRB), the central bank, has decided to maintain the current policy rate, deposit collection rate, and bank rate through the first quarterly review of the monetary policy for the fiscal year 2081/82 BS. This decision comes amid positive monetary indicators.
The NRB announced that the policy rate will remain unchanged at 5%, the deposit collection rate at 3% (the lower limit under the interest rate corridor), and the bank rate at 6.5% (the upper limit). The mandatory cash reserve ratio and statutory liquidity ratio also remain at their existing levels.
This policy continuity is aimed at supporting the government’s economic growth target by fostering economic activity, maintaining price stability, and ensuring external sector stability.
During the first quarter of the fiscal year, average consumer inflation stood at 4.26%. The price of food and beverages rose by 7.18%, while the non-food and services group saw a 3.49% increase. Annual point consumer inflation was recorded at 4.82%.
The NRB reported that foreign exchange reserves are sufficient to cover 14.5 months of imports, exceeding the monetary policy’s goal of sustaining imports for at least seven months.
In Ashwin (mid-September to mid-October), private sector credit increased by 13.3% year-on-year, while the weighted average interbank rate among financial institutions was 3%. Broad money supply and private sector credit from the monetary sector grew by 12% and 12.5%, respectively.
The central bank’s decision reflects a cautious approach, ensuring economic stability while promoting sustainable growth.
30th Nov 2024
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