The Nepal Rastra Bank (NRB) has issued the monetary policy for the upcoming fiscal year 2082/83 (2025-26).

Unveiling the monetary policy, the Governor of the Central Bank, Dr. Biswo Nath Poudel, stated that a flexible policy has been adopted cautiously.

The monetary policy mentions approving and implementing the second financial sector strategy. The bank rate, which serves as the upper limit of the interest rate corridor, has been set at six per cent, and the policy rate at four and a half per cent. Previously, the bank rate was 6.5 per cent and the policy rate was 5 per cent.

According to the monetary policy, the limit for loans issued for the construction and purchase of private residential houses has been increased from Rs 20 million to Rs 30 million. When constructing or purchasing the first house, a loan-to-value ratio of up to 80 per cent can be maintained, while for others, a maximum of 70 per cent can be established.

The limit for personal share collateral loans has been increased from Rs 150 million to Rs 250 million.The limit for the amount Nepalese traveling abroad can carry has been increased from two thousand five hundred US dollars to three thousand US dollars.

The monetary policy has set a target to increase the private sector loan disbursement by 12 per cent in the upcoming fiscal year. (RSS)

Investigations and actions to be made effective to get out of FATF 'grey list'

Nepal Rastra Bank (NRB) has adopted a policy to effectively monitor, investigate, and take action against suspicious transactions in order to remove Nepal from the 'grey list' of the Financial Action Task Force (FATF) regarding the money laundering issue.

The monetary policy for the upcoming fiscal year 2082/83 (2025-26) states that investigation, prosecution and action will be made effective to quickly remove Nepal from the grey list according to the action plan.

Effective coordination will be ensured among the concerned bodies to complete the tasks as per the action plan to free Nepal from the FATF's rigorous surveillance list, also known as the grey list, it is stated.

"The surveillance, research, and actions will be further strengthened for the full implementation of the national strategy and action plan related to the central bank," it is stated in the monetary policy.

The monetary policy mentions that priority actions and improvement suggestions related to the regulatory bodies outlined in Nepal's third phase mutual evaluation report published by the Asia-Pacific Group (APG) will be implemented with priority.

It is also stated that the financial intelligence for transmitting financial information from the unit under the central bank to the relevant bodies will be automated, facilitating the effectiveness of the investigation.(RSS)

The Nepal Rastra Bank (NRB) has reduced the policy rate to 4.5 per cent for the fiscal year (FY) 2025/26 from 5 per cent of the FY 2024/25.

Unveiling its Monetary Policy for the FY 2025/26, the NRB announced today a new policy rate of 4.5 per cent for next FY from existing 5 per cent. Policy rate is interest rate of the loan provided by NRB to the banks and financial institutions for short term.

In addition, it has reduced the bank rate which is upper limit of interest rate corridor (IRC) to 6 per cent for upcoming FY from the previous (FY) rate of 6.5 per cent. Similarly, the deposit rate which is lower limit of IRC is reduced to 2.75 per cent for the upcoming FY from 3 per cent of the current FY.

Meanwhile, statutory liquidity ratio (SLR) and cash reserve ratio (CRR) will not be changed.

Similarly, bank rate which is benchmark for providing standing liquidity facility (SLF) will not be changed.