Nepal Rastra Bank (NRB) Friday made public the first quarterly review of the monetary policy for the current fiscal year.
NRB has reviewed its monetary policy considering the needs to manage the growing credit demand and increase the scope of resources mobilization. The central bank Friday made public the first quarterly review of the monetary policy for the current fiscal year to maintain the existing cash reserve ratio, bank rate and statutory liquidity ratio.
As the economic recovery picks up, credit flows and imports have increased at a higher rate. Accordingly, the policy direction of the monetary policy has been continued in view of the need to manage the growing credit demand and avoid a shortage of resources in the productive activities, said the NRB.
In addition, monetary management will be made effective keeping in view the recent pressures on the balance of payments and the possible pressure on inflation.
As per the new provision of the monitory policy, the Banks and Financial Institutions (BFIs) will have to implement the action plan to maintain the Credit-Deposit Ratio within the prescribed limit by mid-July 2022 after getting approval from the Board of Directors and submitting it to the NRB
It said provision would be made to keep cash margin compulsorily when opening import letter of credit for specified goods. The arrangement will be made to provide an exchange facility for importing silver only up to the maximum exchange facility of the amount provided while importing through draft / TT, the NRB said.
The NRB said that the arrangement had been made for the commercial banks to issue bank guarantees if the Nepali firms and companies related to commercial agriculture, manufacturing industry, infrastructure construction and tourism want to take an institutional loan from abroad. The existing arrangements, including the interest rates and fees for foreign currency loans, will be reviewed.NRB has said that the system of collecting foreign currency deposits from foreign institutions involving non-resident Nepalis will be simplified.
Source: The Rising Nepal
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