Kathmandu, July 7: The Nepal Rastra Bank (NRB) has unveiled its monetary policy with a projection to keep inflation within 5.5 percent.
Announcing the monetary policy for the upcoming fiscal year, Governor Bishwo Nath Poudel said the central bank aims to maintain inflation below the 5.5 percent threshold. He stated that the policy has been introduced with the primary objective of ensuring overall monetary stability.
To achieve this goal, the central bank has proposed institutional reforms in banks and financial institutions, reducing their cost of capital mobilization, and ensuring that the resulting savings are effectively passed on to borrowers through lower lending costs.
Governor Poudel said the policy also envisions the reclassification of banks and financial institutions to promote specialized banking services based on the size and nature of their businesses. It also introduces greater flexibility in the procedures for opening and closing bank branches.
He further announced that the practice of requiring personal guarantees from corporate borrowers—which often creates unlimited personal liability—will be tightened and gradually phased out. The policy also seeks to minimize the number of individuals placed on the banking blacklist, introduce measures to manage non-performing loans in distressed industries, and provide new instruments for the revival of stressed loans.
Governor Poudel expressed confidence that although the government’s budget and the prevailing liquidity and interest rate conditions are expected to stimulate economic activity and gradually absorb excess liquidity, continued inflows from remittances, tourism earnings, and public expenditure will ensure that liquidity remains adequate and under control. He added that the monetary policy continues to follow a flexible stance to support economic growth.
The central bank has projected an 11 percent expansion in private sector credit and a 14 percent increase in broad money supply for fiscal year 2083/84 (2026/27).
The policy rates under the interest rate corridor—including the policy rate, standing deposit facility rate, and bank rate—have been kept unchanged. Likewise, the existing provisions relating to the Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), and Standing Liquidity Facility (SLF) will remain in effect.
Governor Poudel said the monetary policy emphasizes policy reforms designed to safeguard the interests of the general public, depositors, borrowers, as well as banks and financial institutions.
People’s News Monitoring Service.
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