By Our Reporter
Four days after Nepal Rastra Bank (NRB) made public the first quarterly review of the monetary policy for the current fiscal year maintaining the existing monetary instruments, including cash reserve ratio and bank rate, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has objected to the economic policy.
Organising a press meeting on Wednesday, the FNCCI, termed the ‘working capital loan’ as the main obstacle to the business and private sector growth and said that it would not be possible to continue business if the present economic challenges persisted.
After the Nepal Rastra Bank (NRB) indicated its reluctance for immediate revisal in the Guidelines on Working Capital Loan, 2022 issued in August, the FNCCI has warned of additional programmes to protest the implementation of it and the exorbitant bank interest rate.
Releasing the review of monetary policy, the spokesperson of NRB Dr. Gunakar Bhatt on Sunday said that liquidity would be provided to banks and financial institutions so that interest rates did not escalate further.
According to NRB, the mandatory cash ratio has been kept at 4 per cent and the bank rate at 8.5 per cent.
The central bank has reduced the spread rate by 0.4 percentage points while reviewing the monetary policy today.
“Since there is no environment to run the business, the private sector is forced to agitate. This is not our choice, it has become an obligation,” said the president of the FNCCI, Shekhar Golchha while warning that if the government failed to announce programmes to support the private sector and reform the economy, the private sector would announce additional programmes of protest.
“We express our solidarity with all the protests and agitation programmes organised by the district chambers,” he said. “However, we want the solution to the present challenges through dialogue with the concerned stakeholders including the NRB and the government.”
Golchha demanded a halt to the implementation of the guidelines for at least two years.
The FNCCI, along with other business bodies like the Confederation of Nepalese Industries (CNI) and Nepal Chamber of Commerce (NCC), and dozens of commodity associations and district chambers, has been voicing its reservations over the guidelines that put a cap of 25 per cent on the working capital loan. This loan is a facility for businesses and industries to finance their daily operations and is not used to buy long-term assets.
The FNCCI wants the government to expedite the development work and increase the money flow in the market, attract more foreign direct investment, initiate the process to get the country rating and implement the provision to provide loans to the manufacturing industry at lower rates than the trading companies – a provision which was announced through the budget of the current Fiscal Year 2022/23.
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