Nepal Rastra Bank Maintains Key Monetary Policy Rates in Mid-Year Review, Focuses on Production Sector Lending
Summary
Nepal Rastra Bank maintains key monetary policy rates in its mid-year review, focusing on expanding credit to production-oriented sectors including tourism, IT, and export industries, while revising loan terms and foreign exchange risk management.
Key Points
- Nepal Rastra Bank kept interest rate corridor, bank rate, cash reserve ratio, and liquidity ratio unchanged in the mid-year monetary policy review.
- The scope of sectoral credit ceilings has been expanded to include tourism, IT, and export-oriented industries alongside agriculture, energy, and small enterprises.
- Loan tenures for working capital will now be based on borrower cash flow and financial analysis, with relaxed outstanding balance requirements.
- Foreign investment facilitation will focus on infrastructure like data centers, cloud computing, robotics labs, and AI, with encouragement of co-financing.
- The central bank will promote electronic payment systems and implement borrower-friendly measures to prevent blacklisting for circumstantial loan defaults.
