Monetary Policy 2022/23 focuses on boosting productivity

KATHMANDU: The monetary policy for the current fiscal year 2022/23 has been unveiled aiming at keeping external sector stability by controlling inflation. The monetary policy has focused on promoting overall fiscal stability and boosting productivity by mobilising fiscal instruments for the productive sector. Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari unveiled the policy on Friday. He said the policy has cautiously brought tight measures in a way to support the government's target of achieving higher economic growth. The monetary policy has placed emphasis on mobilising loans in productive sector rather than expanding credit in the context of high credit-GDP ratio. Likewise, the policy has laid focus on gradually reducing facilities and regulatory arrangements provided during the Covid 19 pandemic and formulating wise regulatory standards. The re-financing facility will be subject to revision so as to limit the facility to the most affected sectors including productive sectors and export and the areas which are yet to be recovered from the effects of the pandemic. The monetary policy has put emphasis on enhancing access to credit for small, cottage, micro and medium-scale enterprises and gradually slashing loan centralization. Similarly, the policy will keep differences at interest rates of loans to be mobilised in definite productive sector and business sector. The policy has laid emphasis on maintaining financial stability through overall self-regulation and reforms in credit quality. The policy has also set a target to expand the scope of monetary policy by enhancing financial literacy, financial access and financial inclusion as well as digitalizing payments and financial transactions. Merger and acquisition facility expanded up to next mid-January The policy has extended timeline for the merger and acquisition of banks and financial institutions (BFIs). Governor Adhikari shared that BFIs adopting merger and acquisition up to next mid-January will be provided with the facilities for this. Earlier, the NRB had given the merger and acquisition facility deadline up to mid-July. Likewise, there will be no halt of transactions of the BFIs while going for merger and acquisition. Earlier this arrangement was in place. With the new policy shift, the merger and acquisition will be as per the regulation of the Securities Board of Nepal (SEBON). READ ALSO:

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