KATHMANDU: Nepal Rastra Bank (NRB) has published the first quarterly review of the monetary policy for the current fiscal year. The review highlights that no changes have been made to the policy framework, keeping the policy rate at 5 percent, the deposit collection rate at 3 percent, and the upper limit of the interest rate corridor, the bank rate, at 6.5 percent.
The mandatory cash reserve ratio and statutory liquidity ratio also remain unchanged. The monetary policy for fiscal year 2081/82 BS was introduced on July 27, 2024, with the objective of maintaining price and balance of payments stability for sustainable economic growth.
Key Points:
– Inflation: Average consumer inflation for the first three months was recorded at 4.26 percent, slightly below the targeted 5 percent.
– Foreign Exchange Reserves: As of October 2024, foreign exchange reserves can cover 14.6 months of imports, exceeding the policy target of seven months.
– Interest Rate Corridor: The upper limit of the bank rate is set at 6.5 percent, and the policy rate remains at 5.0 percent.
– Interbank Rates: The average interbank rate for the first quarter was 3.00 percent.
– Monetary Growth: Broad money supply increased by 13.3 percent, while private sector credit grew by 6.2 percent as of October 2024.
The review outlines the current state of the economy, emphasizing the central bank’s commitment to maintaining macroeconomic stability amid internal and external challenges.