Monetary Policy Nepal 2026
Nepal’s central bank unveils new monetary policy
What happened
Nepal Rastra Bank announced its monetary policy for FY 2026-27, targeting inflation control, economic growth, and credit expansion to support post-pandemic recovery.
Timeline
Policy Supports Fiscal Measures
Jul 08, 05:29Governor Dr. Bishwa Paudel unveiled a shorter, more focused monetary policy emphasizing a supportive role to the government's fiscal policy, targeting 11% credit expansion to help achieve 7% economic growth. The approach marks a shift from previous policies, aiming for collaboration rather than sole economic leadership.
Flexible Policy Announced
Jul 08, 04:42Nepal Rastra Bank introduced a flexible monetary policy focused on supporting 7% economic growth through increased lending and investment, projecting average inflation at 5.5%. The policy aims to expand bank lending by Rs 652 billion amid risks from geopolitical tensions and regional inflation.
Loan Policy Adjusted
Jul 07, 14:17Monetary policy eases loan-to-value ratio for public transport electric vehicles and raises unsecured loan ceilings for microfinance institutions to support credit expansion and economic recovery.
Previous Targets Unmet
Jul 07, 11:29Nepal Rastra Bank failed to meet 24 monetary policy targets set for fiscal year 2082/83, including institutional reforms and digital banking initiatives. Key pending tasks include establishing an Asset Management Company and amending corrective action regulations.
Banking Reforms Introduced
Jul 07, 11:27The new monetary policy promotes specialized banking by reclassifying banks and financial institutions by size and nature, encourages digitization of services, and allows flexible branch operations to reduce costs.
Public Debt Increased
Jul 07, 11:07Nepal's public debt rose to Rs 2.96 trillion in the first 11 months of fiscal year 2025/26, reaching 44.9% of GDP. Debt increased by around 48% over four years due to budget deficits and other expenditures, with low risk of debt distress but growing vulnerabilities.
Growth Target Forecasted
Jul 07, 10:52Nepal Rastra Bank forecasts 7% economic growth for fiscal year 2026/27 contingent on effective implementation of reforms and public spending. The economy grew by 3.85% in the current fiscal year, with the services sector expected to drive next year's growth.
Monetary Policy Released
Jul 07, 10:20Nepal Rastra Bank released its 25th annual monetary policy for fiscal year 2083/84, targeting 7.0% economic growth and inflation around 5.5%, with key interest rates and cash reserve ratios unchanged.
Economic Confidence Crisis
Jun 29, 09:59Nepal's economy faces confidence challenges caused by anti-corruption measures, political unrest, and delayed government spending, stalling private investment despite ample liquidity and remittances. GDP growth fell short of targets with key sectors underperforming amid rising business uncertainty.
Latest Coverage
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