KATHMANDU: Nepal Rastra Bank Governor Maha Prasad Adhikari today 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 will focus on achieving economic growth as per the budget target, controlling inflation and managing the external sector, Governor Adhikari 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 still persist, he said.
"The permissible limit of inflation for the previous fiscal year was 7%, and it remains above that in the current fiscal year. The reserve fund is in a deficit of Rs 193 billion. The credit expansion has decreased despite good deposit collection," he said and added, the external sector seems to facilitate as compared to the previous year.
[caption id="attachment_39596" align="alignnone" width="1000"]
Lawmakers and other stakeholders attend the meeting of the Finance Committee under the Federal Parliament's House of Representatives, held in Singha Durbar, Kathmandu, on Thursday, July 20, 2023. Photo: RSS[/caption]
"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. Until June 15, 2023, a total of 147,510 individuals took concessional loans, he said.
The Central Bank will 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 central bank, the interest and base rates of loans and deposits are decreasing, and the CD ratio has dropped to 82%.
The government has set a target of keeping inflation within the permissible limit of 6.50% in the current fiscal year, and the monetary instruments will be mobilised accordingly, the bank said.
Finance Secretary Arjun Prasad Pokharel opined that there should be synchronisation between fiscal policy and monetary policy.
Similarly, achieving economic growth and keeping inflation under control should be the priority of the monetary policy apart from setting priorities in implementing the government's policies and programmes for increasing loans in the productive sector and domestic productions, Pokharel said.
By RSS
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Lawmakers and other stakeholders attend the meeting of the Finance Committee under the Federal Parliament's House of Representatives, held in Singha Durbar, Kathmandu, on Thursday, July 20, 2023. Photo: RSS[/caption]
"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. Until June 15, 2023, a total of 147,510 individuals took concessional loans, he said.
The Central Bank will 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 central bank, the interest and base rates of loans and deposits are decreasing, and the CD ratio has dropped to 82%.
The government has set a target of keeping inflation within the permissible limit of 6.50% in the current fiscal year, and the monetary instruments will be mobilised accordingly, the bank said.
Finance Secretary Arjun Prasad Pokharel opined that there should be synchronisation between fiscal policy and monetary policy.
Similarly, achieving economic growth and keeping inflation under control should be the priority of the monetary policy apart from setting priorities in implementing the government's policies and programmes for increasing loans in the productive sector and domestic productions, Pokharel said.
By RSS
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Published Date: July 20, 2023, 12:00 am
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