What do banking experts say about NRB’s monetary policy 2019/20? (Watch Video)

KATHMANDU, July 25: The Nepal Rastra Bank on Wednesday introduced its monetary policy for the fiscal year 2019/20. The monetary policy has focused on addressing the liquidity problem in the banking sector and stabilizing fluctuation in interest rate.

The monetary policy includes measures to ease the existing shortage of lendable funds at banks and financial institutions and lower interest rates borrowing costs for business.

The NRB has lowered the general refinance rate to three percent from four percent in order to make loans cheaper for priority sectors such as tourism, manufacturing and energy.

The NRB has also diversified the sources for bank and financial institutions to get funds from abroad allowing them to get funds in foreign currency from pension funds, hedge funds and sources abroad.

The banks and financial institutions will also be allowed to collect deposits on foreign currency from institutions, foreign depositors and non-residents Nepalis, and 100 percent of such deposits with a maturity period of two years can be distributed as loans.

The commercial banks will require issuing 25 percent of their paid-up capital in debentures by mid-July 2020.

Here is what the banking experts have said about the monetary policy. Watch video: