Amidst all the buzz surrounding the Nepal Monetary Policy 2018-19, Nepal Rastra Bank (NRB) said that the policy will primarily aim at maintaining financial stability, promoting agriculture and enhancing investment in the agricultural sector in a discussion program held on June 11, 2018.
In the discussion program held in Kathmandu, NRB Governor Chrianjibi Nepal said that the policy will create measures to support and achieve targets outlined in the Budget for FY 2018-19, which covers economic growth, inflation projection, infrastructure and agriculture goals.
“The budget for Fiscal Year 2018-19 has set targets on the basis of the country’s improving business and economic climate in the last couple of years. The monetary policy will try to capture this momentum of growth in the country which will lead to achieving the set economic growth and development targets,” said Nepal Governor.
The governor also mentioned that the monetary policy will create certain measures to arrest inflation within the targeted 6.5 percent range and put stability in the financial sector first.
Experts Take On Policy
Former Finance Minister Madhukar SJB Rana opines that the Central Bank should look to solve key monetary issues like people’s access to financial institutions and lack of stability in financial policies through the new policy.
Former NRB Governor Dipendra Bahadur Kshetry insists the Central Bank should not only work towards creating support measures for accomplishing the budget’s goals, but also enhance the regulatory framework.
“The Central Bank has mandated banks to inject at least 25 per cent of their total loan portfolio to various identified productive sectors. But are banks lending as per this provision?” Kshetry asks.
Nepal Bankers Association President Gyanendra Dhungana says that the monetary policy should be flexible to ease capital formation in the country.
Dhungana adds that the policy should create a measure that encourages mergers between banks and financial industries and increase the overdraft facility limit for business loans, currently at 15 per cent.
Nepal Financial Institutions Association (NFIA) President Saroj Kaji Tuladhar thinks that the policy should cater to the margin lending issue in the secondary market. He persuaded the Central Bank to increase the loan-to-value ratio by 10% on housing loans since the current monetary policy has squeezed housing loans.
Nepal’s Monetary policy was unveiled on June 11th, 2018 addressing several issues concerning Nepal’s finances which included the exchange rate hedging facility for foreign investors who seek to make investments in the country’s infrastructure sector.
Through this policy, the Central Bank will make more room for FDI and help the government achieve its targeted economic growth of 8 percent.
World nations observed the World Population Day (WPD) on July 11, 2018 highlighting various issues pertaining to population-related issues globally....