Nepal Rastra Bank adjusts interest rates for fixed deposits
KATHMANDU: The Nepal Rastra Bank has unveiled the mid-year review of the monetary policy for the ongoing financial year, outlining new measures to regulate interest rates on fixed deposits.
As per the review, the central bank has introduced fresh arrangements to govern the interest rates on fixed deposits and establish an interest rate corridor.
Effective mid-February, the fixed deposit facility will be implemented with a key adjustment concerning institutional fixed deposit interest rates.
In accordance with the policy, the interest rate for institutional fixed deposits will be set one percentage point lower than the rate offered for individual fixed deposits.
This move is aimed at fostering an effective interest rate corridor and promoting financial stability.
Additionally, the monetary policy review has introduced provisions to include loans of up to Rs. 20 million extended to agricultural, small, cottage, and medium-scale enterprises within the 'Regulatory Retail Portfolio.'
This initiative is expected to facilitate easier access to credit for these sectors, thereby fostering economic growth and development.
The interest rate corridor remains unchanged from the first quarterly review, reflecting considerations of both domestic and international economic conditions.
Provisions related to mandatory cash reserve ratio and statutory liquidity ratio have been maintained to ensure the stability of the financial system.
Concurrently, the Ministry of Finance has issued the half-yearly review of the current fiscal year's budget, revising income and expenditure estimates accordingly.
The Ministry's adjustments aim to align fiscal policies with prevailing economic realities and promote fiscal sustainability.
The unveiling of these policy reviews underscores the government's commitment to implementing prudent economic measures and fostering a conducive environment for sustainable growth and development.