Nepal’s central bank sticks to cautiously flexible monetary policy, backs government’s 7 percent growth
Summary
Nepal Rastra Bank maintains a cautiously flexible monetary policy for fiscal year 2026-27, supporting the government's 7 percent growth target while aiming to keep inflation around 5.5 percent with stable foreign exchange reserves.
Key Points
- Nepal Rastra Bank retains a cautiously flexible monetary policy stance to support 7 percent economic growth and about 5.5 percent inflation.
- Key policy rates remain unchanged; liquidity and foreign reserves are adequate to sustain the macroeconomic environment.
- Monetary policy eases loan-to-value ratio for public transport electric vehicles and raises unsecured loan ceilings for microfinance.
- Risks to growth include geopolitical tensions in West Asia, potential super El Niño impacts, and the need for government reforms and capital spending.
