Director of Nepal Rastra Monetary Policy Comes With Inflation Control And Financial Stability At The Center

Director of Nepal Rastra Monetary Policy Comes With Inflation Control And Financial Stability At The Center

July 10, 2023, 7:48 a.m.

Bank Chintamani Sivakoti has said that the monetary policy for the next financial year will be introduced with the focus on price inflation control and financial stability.

Sivakoti said this while speaking at an interaction program on 'Nepal's Economic Situation and Upcoming Monetary Policy' organized by Economic Discussion Chautari Nepal in Kathmandu today.

As prescribed by the National Bank of Nepal, the monetary policy will mainly focus on two issues. Keeping inflation under control and maintaining financial stability are key," he said. According to Sivakoti, even though the monetary policy does not directly look at issues such as increasing government revenue and increasing employment, these areas can be addressed through some financial arrangements.

Revenue has not been raised as per the target set by the government for the current financial year. But he said that the main problems seen now are the low revenue and the crisis in the cooperative sector. According to Sivakoti, in order to achieve the goal of economic growth set by the government and to create jobs, it will be seen in which areas credit expansion will be increased.

Similarly, he also admitted that Nepal Rastra Bank is weak in its regulatory role. He also said that the banks are giving 30 percent of the assessment for housing in the Kathmandu Valley and 40 percent for those outside the valley, so it can be increased.

Similarly, he said, it is time to review the policies taken before and look at the results in the capital market sector. Similarly, Sivakoti also clarified that Rashtra Bank is not in a situation where refinancing can be given.

He also indicated that the monetary policy of the next financial year will not be too strict or flexible but moderate in a balanced way.

The monetary policy focuses on increasing investment in digital economy and innovation. It is time to consider whether the implementation of the counter-cycling buffer should be postponed by one more year.

The issue of implementing the current capital loan procedure can also be addressed by delaying it for some time," Sivakoti said. "It is time to think about how the monetary policy will regulate the big borrowers. The National Bank takes necessary and appropriate decisions on matters such as re-loaning, rescheduling, foreign exchange facilities, etc.’

Similarly, he also said that the board of directors decided to amend the Nepal Rastra Bank Act by fixing a certain time to bring the monetary policy every year. According to Sivakoti, the law amendment has been proposed with the provision of issuing the monetary policy within seven working days after the government brings the federal budget.

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