Monetary Policy 2077/78 of Nepal (Maudrik Niti 2077/2078) of Nepal has been published by NRB. The much-awaited monetary policy for the fiscal year 2077/ 78 has been unveiled today at 3 p.m._x000D_ _x000D_ The policy was publicly unveiled by NRB Governor Maha Prasad Adhikari via Nepal TV live._x000D_ _x000D_ The monetary policy is highly expected to revamp the collapsing economy because of the Covid-19 pandemic._x000D_ _x000D_ The policy was approved in the meeting of the board of directors of Nepal Rastra Bank this morning._x000D_

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_x000D_ The monetary policy has now made it impossible to obtain a microfinance license. This is likely done because the microfinance sector in Nepal is already saturated._x000D_ _x000D_ Also, any microfinance license under the process of issuance has been abandoned._x000D_ _x000D_ The monetary policy has said that in view of the economic impact caused by the Covid-19 pandemic, liquidity will be eased and credit balance will be shifted._x000D_ _x000D_ The following provisions are being implemented to do so:_x000D_ _x000D_
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Projection of the 2077/ 78 fiscal year scenario

_x000D_ 1) Annual Growth Rate target set at 7%._x000D_ _x000D_ 2) Aim to limit consumer inflation no higher than 7%._x000D_ _x000D_ 3) A permanent liquidity facility rate of 5% will be maintained as the upper limit of the interest rate corridor._x000D_ _x000D_ 4) Deposit collection rate, which has been established as the lower limit of the corridor will be reduced from 2% to 1%._x000D_ _x000D_ 5) The Repo Rate has been reduced from 3.5% to 3%._x000D_ _x000D_ 6) Long-term Repo service will be made available to improve much-needed liquidity for financial rehabilitation._x000D_

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_x000D_ 7) The Mandatory cash ratio of 3 percent to be maintained by banks and financial institutions is kept intact._x000D_ _x000D_ 8) The statutory liquidity ratio to be maintained by commercial banks of 10 percent, while that of development banks of 8 percent Percent and the finance company of 7 percent has been kept intact._x000D_ _x000D_ 9) The lender of last resort rate has been kept intact at 5%._x000D_ _x000D_ 10) Commercial banks will have to issue at least 15% of their loans in the agriculture sector by 2080 Ashadh end._x000D_ _x000D_ 11) Agriculture Development Bank will be established as a "Lead Bank" in the agriculture sector. It can also issue Agriculture Bonds to ensure long-term availability of resources._x000D_ _x000D_ 12) Inter-bank transactions of Agriculture Credit Swaps will be further simplified._x000D_ _x000D_ 13) Commercial banks will have to issue at least 10% of their loans in the energy sector by 2081 Ashadh end._x000D_ _x000D_ 14) Commercial Banks experienced in the energy sector will be allowed to issue Energy Bonds._x000D_ _x000D_ 15) CCD Ratio has been increased from 80% to 85%._x000D_ _x000D_ 16) BFI's with a distributable profit lower than 5% of their paid-up capital, the distribution of cash dividend will be forbidden._x000D_ _x000D_ 17) BFI's with a distributable profit higher than 5% of their paid-up capital will be allowed to distribute 30% of dividends as cash dividend in maximum._x000D_ _x000D_ 18) However, companies that satisfy the criteria in point 17 can't distribute cash dividend that amounts to a larger sum than their Deposit Weighted Average maintained in Ashadh 2077._x000D_ _x000D_ Monetary Policy FULL TEXT_x000D_

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