Nepal Rastra Bank Announces 'Cautiously Flexible' Monetary Policy

Kathmandu - Nepal Rastra Bank has announced the monetary policy for the current fiscal year 2081-82. Governor Maha Prasad Adhikari unveiled the 'cautiously flexible' monetary policy during a press conference on Monday.

The policy includes a decision to lower the policy rate. Governor Adhikari announced that the current policy rate has been reduced from 5.5 percent to 5 percent. Similarly, the bank rate has been reduced from 7 percent to 6.5 percent.

The main objective of this monetary policy is to increase liquidity in the banking sector and support the economy, according to Governor Adhikari. Lowering the policy rate is expected to make borrowing easier and stimulate investment, which in turn is believed to positively impact the country's economic growth.

Economists suggest that this type of monetary policy will help accelerate economic activities by increasing cash flow in the market. Additionally, it will encourage banks and financial institutions to lend more, contributing to economic stability.

It remains to be seen how this move by Nepal Rastra Bank will impact the country's economic landscape, but the policy has sent positive signals to the market.