Nepal Rastra Bank Reviews Monetary Policy for FY 2082/83, Presents Implementation Status

Kathmandu. Nepal Rastra Bank has published the implementation status of economic and monetary targets by releasing the annual review report of the monetary policy for the fiscal year 2082/83. According to the report, most of the indicators for the current fiscal year appear to be within the target range.

Although the government had set a target to keep consumer inflation within the limit of 5.0 percent for the fiscal year 2082/83, the average consumer inflation for the ten months of the current fiscal year has been only 2.66 percent. However, the annual point-to-point inflation in the month of Baishakh 2083 has reached 5.04 percent.

Similarly, the monetary policy had projected the growth rate of broad money supply to be up to 13.0 percent and the growth rate of credit to the private sector to be up to 12.0 percent. However, according to the data for Baishakh 2083, the growth rate of broad money supply on a point-to-point basis has exceeded the target, reaching 15.2 percent, while the growth rate of credit to the private sector has been limited to much less than the target, at 6.5 percent.

On the other hand, the external sector situation appears quite strong. The monetary policy for the fiscal year 2082/83 had set a target to maintain foreign exchange reserves sufficient to cover at least seven months of merchandise and services imports. According to the central bank's review, the foreign exchange reserves maintained at the end of Baishakh 2083 are sufficient to cover 19.2 months of merchandise and services imports, which is much higher than the target.