Kathmandu, July 20
The Nepal Rastra Bank Governor Maha Prasad Adhikari said the monetary policy for the fiscal year 2023/24 will be issued in line with the budget policy. Preparations are underway to bring the monetary policy the next week, he said.
The monetary policy would focus on achieving economic growth as per the budget target, controlling inflation and managing the external sector, he said while attending the meeting of the Finance Committee under the Federal Parliament’s House of Representatives.
Although there are some positive economic indicators like the balanced external sector, decreasing interest rates and adequacy of liquidity, some problems like inflation, deficit reserve fund and sluggish credit expansion persist, he said.
“The permissible limit of inflation for the previous fiscal year was seven per cent, and it remains above that this fiscal year. The reserve fund is in a deficit of Rs 193 billion. The credit expansion has decreased despite good deposit collection,” he said.
The external sector seems to facilitate as compared to the previous year, he said.
“Now, there is liquidity worth Rs 88.5 billion in the banking system. The current accounts suffer a deficit of Rs 70 billion, and there were difficulties to recover loans due to the market slowdown,” he said.
The Central Bank would take an appropriate decision in finding ways to balance the country’s economy, he added. “Today’s problems are a slowdown in real estate, and failure to collect revenues and achieve capital expenditure as per target. The monetary policy does not have all instruments to resolve problems. We will use whatever instruments we have,” he said.
According to the Nepal Rastra Bank, the interest and base rates of loans and deposits are decreasing, and the CD ratio has dropped to 82 per cent.
