NRB Governor Adhikari claims maintaining fiscal stability amid COVID, supply crisis

KATHMANDU: The five-year tenure of Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari is set to conclude this week.

Addressing a press conference at the bank’s central office in Kathmandu today, Governor Adhikari stated that the central bank has successfully maintained economic stability by refining its monetary policy amidst challenges posed by the Covid 19 pandemic, the Russia-Ukraine conflict, and the supply chain crisis.

Governor Adhikari highlighted that policy reforms implemented to ease external sector pressure during his term have played a crucial role in strengthening Nepal’s financial stability. He noted that the current foreign exchange reserve is sufficient to sustain imports for 14.4 months and emphasised that NRB has kept inflation within target limits by promptly revising monetary policies.

He said, "The NRB implemented various concessional fiscal and monetary policies to mitigate the impact of the Covid 19 pandemic. A flexible approach was adopted to support the flow of credit to banks and financial institutions during challenging circumstances." According to him, this approach has positively impacted business operations, investment promotion, and contributed to economic recovery.

Governor Adhikari further stated that regulation and supervision of banks and financial institutions have been reinforced to ensure financial stability, with effective risk mitigation measures in place.

He pointed out that the use of digital payment systems, mobile banking, QR code payments, internet banking, and digital wallets has risen significantly over the past five years. He remarked, "Electronic payment transactions have doubled in Fiscal Year 2080/81 compared to Fiscal Year 2077/78, promoting digital financial inclusion." He added that the central bank has prioritised cyber security through necessary policy and technological reforms to support the growth of digital transactions.

The NRB Governor also mentioned that 116 policy provisions have been implemented to enhance institutional reforms and improve performance. He stated that regulatory and supervisory frameworks have been aligned with international practices to strengthen the financial system, with special attention to cybersecurity as the banking system increasingly adopts digital solutions.

Governor Adhikari marked the occasion by releasing a book that documents the major works and achievements of NRB during the past five years.

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