NRB Moves to Absorb Rs 90 Billion Liquidity in a Single Day

The Nepal Rastra Bank (NRB) has announced that it will absorb Rs 90 billion from the banking system in a single day, citing an excessive liquidity build-up across financial institutions. The central bank is deploying its 84-day deposit collection instrument to pull excess liquidity and stabilize short-term money market conditions.

According to NRB, both the principal and interest of this instrument will mature on Falgun 17, with the interest rate determined through a competitive bidding (auction) process. The collected deposits can also be used as collateral at other banks and financial institutions—except the central bank itself.

Banks and financial institutions can submit bids ranging from a minimum of Rs 100 million, up to the full announced amount, provided the bid amount becomes divisible by Rs 50 million without remainder. The auction is scheduled to take place today at 2 PM, the NRB said in its notice.

Market analysts view this move as a significant step toward short-term liquidity management, as deposits have been rising sharply while credit demand remains weak. By withdrawing excess funds from the system, the central bank aims to prevent overheating and maintain monetary balance.