Nepal's economy will recover gradually post-pandemic, says NRB governor

KATHMANDU: Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari has stated that Nepal's economy, which faced setbacks following the April 2015 earthquake and the Covid 19 pandemic, is gradually recovering two years after the pandemic.

Speaking at the International Conference on Economics, Finance, and Related Themes, organised by Nepal Open University and Cardiff University, UK, in Lalitpur, on Thursday, Governor Adhikari said that the construction, industry, and trade sectors have shown significant progress in the two years since the earthquake and pandemic. "The central bank has initiated major reforms through monetary policy alongside fiscal advancements," he remarked. He added, "The global economic situation continues to recover slowly and unevenly from the shocks of the pandemic and subsequent geopolitical tensions."

Governor Adhikari emphasised the necessity for policy harmonisation to mitigate the impacts of global shocks on economic activity, given the interconnectedness of global markets.

In addition to financial reforms, the NRB has embarked on significant operational reforms in monetary policy aimed at enhancing the effectiveness of monetary policy transmission. "Recent policy reforms have focused on modernising monetary policy operations, improving credit quality, emphasising digital banking and FinTech, developing a modern payment system and integrating it into the global market, and continuing financial consolidation measures," Governor Adhikari asserted.

He highlighted Nepal's focus on better coordination between monetary and macro-prudential policies, with efforts to channel credit towards productive sectors to ensure the banking sector supports sustainable economic development and reduces the risk of asset bubbles. The Governor reiterated that Nepal's external sector is in a relatively comfortable position, with a balance of payments and current account surplus, and adequate foreign exchange reserves.

At the event, Vice Chancellor of Nepal Open University Shilu Manandhar Bajracharya, Professor Kul Luintel of Cardiff University, and other experts shared their insights on economic, fiscal, and related matters.

The two-day conference has attracted 60 experts from Nepal, China, the UK, Norway, Spain, and other countries, with 10 working papers scheduled for presentation and discussion.

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