Central Bank withdraws 20 billion from reverse repo as liquidity accumulates

KATHMANDU, July 11: Liquidity has accumulated in banks and financial institutions as deposits (saving) have increased more than loan demands. Deposits have increased by fourfold in comparison to loan investments.

By July 10, the total deposits of banks and financial institutions reached Rs 5 trillion and 715 billion while the loan investments only reached Rs 4 trillion and 861 billion.

The investable capital (liquidity) has accumulated more than Rs 370 billion even after cutting all the banking tools and safeguards. With this, the Rastra Bank has decided to withdraw an additional Rs 20 billion from reverse repo.

The Central Bank will issue a reverse repo of Rs 20 billion on July 11 for 14 days. Investor banks and financial institutions will be able to apply for the reverse repo by 3 pm today. 

The Central Bank has already issued a reverse repo of Rs 30 billion in total.