NRB to Absorb Rs. 40 Billion Liquidity from the Market Through 35-Day Deposit Collection Auction

Nepal Rastra Bank (NRB) has announced that it will absorb Rs. 40 billion from the financial market to manage excess liquidity. The central bank is conducting the operation through a 35-day Deposit Collection Instrument, inviting bids from banks and financial institutions.

With excess liquidity continuously rising in the banking system, NRB has intensified liquidity absorption measures in recent months. For the past three years, the central bank has been regularly conducting such auctions every Sunday and Wednesday.

Only ‘A’, ‘B’, and ‘C’ class banks and financial institutions are eligible to participate in today’s auction. According to the notice issued by NRB, interested institutions must submit their online bids by 2 PM today.

The purchased Deposit Collection Instrument can also be used as collateral in other banks and financial institutions. Bidders must place offers in such a way that the amount remains divisible by Rs. 5 crores when the minimum bid size of Rs. 10 crores is considered. NRB has also allowed multiple bids under multiple interest rates.

So far, NRB has already absorbed Rs. 420 billion through the Deposit Collection Instrument and an additional Rs. 425 billion through the short-term Standing Deposit Facility (SDF).

At present, the banking system has Rs. 844.50 billion in unutilized funds parked at the central bank, indicating continued pressure in liquidity management.