Friday Jun 21, 2024
Friday Jun 21, 2024

Nepal Rastra Bank to set 14 day repo

2021 Nov 25, 12:14, Kathmandu
As per the macroeconomic report published by Nepal Rastra Bank, the central bank, the year-on-year consumer price inflation stood at 3.02 per cent in the eighth month of fiscal 2020/21.

Nepal Rastra Bank (NRB) is set to issue 14-day repo of Rs 20 billion today. The bank is about to flow into the banking system through repo bidding which will mature on December 9.

The central bank has been issuing repo for some time now for liquidity management due to lack of money to invest in the market. The bank had earlier issued repo of Rs 20 billion on November 11. The central bank has stated that licensed A, B and C approved banks and financial institutions can participate in the bidding.

Lack of liquidity in the system seems to have put pressure on loans and deposits of banks and financial institutions. According to the latest data from the central bank, the average loan-to-deposit ratio has reached 90.31 per cent. According to the provision made by NRB that the loan to deposit ratio of the bank should be 90 per cent, it is difficult for the banks to manage it. According to the public statement, at present the bank is not even able to give loan.

At present, banks and financial institutions have been using instruments such as repo, interbank lending and temporary liquidity facility in liquidity management. According to the central bank, the interbank lending rate has reached 4.96 percent. Similarly, banks and financial institutions have availed temporary liquidity facility. Although banks and financial institutions continue to use such instruments, liquidity management has not been easy.


Nepal Rastra Bank Banking System repo bidding Financial Institutions liquidity deposits of banks
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