Third Quarterly Review of Monetary Policy: Various Interest Rates Kept Stable
May 17, 2024 | Investopaper
Nepal Rastra Bank has released the third quarterly review of monetary policy for the current fiscal year 2080/81. In response to a thorough analysis of factors impacting prevailing inflation, the central bank has opted to keep the various interest rates stable.
Accordingly, the bank rate for bank loans to the private sector will remain unchanged at 7 percent, the policy rate has been fixed at 5.5 percent, and the deposit collection rate is 3 percent.
At present, the external situation is improving and there is accumulation of more liquidity in the banks. Similarly, there has been no change in the mandatory cash reserve ratio and statutory liquidity ratio.
However, the risk weight of hire purchase vehicle loans provided by banks and financial institutions has been reduced from 125 to 100 percent. Likewise, for the purpose of purchase of home/land, Debt Service to Gross Income Ratio has been increased from previous 50 percent to now 70 percent.
Similarly, the loan loss provision for good loans provided by the BFIs has been reduced from 1.25 percent to 1.20 percent.
