NRB Executive Director Poudel Outlines Budget's Economic Goals

Kathmandu. Nepal Rastra Bank's Executive Director and Spokesperson, Guruprasad Poudel, stated that the upcoming fiscal year's budget will formulate policies for the central bank to manage liquidity required for 7 percent economic growth and keep inflation within 6 percent. Poudel said this while speaking at a 'Post Budget' discussion program organized by the Nepal Economic Journalists Association (NEJA) on Monday. He also mentioned the pressure and necessity for the government to present an ambitious budget to address the current extraordinary situation.

Poudel said that economic growth synergy can be achieved as the budget prioritizes good governance, digitalization, and electrification to advance the administrative sector. He stated, 'Economic synergy is expected due to governance-centric plans.'

He mentioned that the budget has directed the central bank to further enhance the effectiveness of steps taken by the bank in the past. 'The budget includes tracking small loans based on economic transactions and credit scores,' he said, adding, 'The central bank is moving forward with this.'

Similarly, the budget also addresses the concept of a fintech marketplace. He expressed confidence that work on this will be faster now that it is included in the budget, as the central bank is also working on it.

Poudel noted that the budget aims to facilitate increased consumption through hire purchase arrangements for various consumer goods. He said, 'The budget appears to be bringing forth concessional loans in a more refined manner for the upliftment of the country's lower-middle class.'

Poudel expressed happiness that the issue of asset management companies has been addressed with a specified timeline for completion. 'This addresses a long-pending issue. It will provide some facilitation in the context of rising non-performing loans and increasing non-banking assets in the financial system recently,' he said.

He stated that the process for asset management companies will be clarified in the law to determine their model and operational methods. Poudel also mentioned that the topic of a sovereign wealth fund has been included in the budget, noting that it addresses how to best utilize the growing foreign exchange reserves. He stated, 'It is necessary to move forward with regulations for this. For banks, liquidity is more important than profitability.'

He said that remittances are a major source of foreign currency and must be handled with great care. He added, 'If foreign currency were earned through the export of any service, it would be easier for investment.'