Central Bank Postpones Long-Term Liquidity Withdrawal Plan Amid Election Uncertainty
Summary
Nepal Rastra Bank has postponed its long-term liquidity withdrawal plan amid election uncertainties, continuing short-term liquidity absorption while monitoring loan demand and market interest rates.
Key Points
- Nepal Rastra Bank has postponed its long-term bond issuance due to potential election-related loan demand.
- The central bank is currently managing liquidity through short-term deposit collections amid excess liquidity of nearly NPR 800 billion.
- Interest rates are maintained within a corridor of 2.75% to 5.75% to control market rates and support liquidity.
- Banks have reduced deposit interest rates, with the maximum now at 5.1%, reflecting cautious market sentiment.
