Nepal Rastra Bank has reduced the interest rate of the overnight liquidity facility by announcing the semi-annual review of the monetary policy.
On Friday morning, announcing the half-yearly review of the monetary policy, NRB has reduced the interest rate of the liquidity facility that the banks take from the National Bank after the cost of domestic debt mobilization has increased.
"Overnight liquidity facility under the daily liquidity facility provided by this bank at a bank rate of 8.5 percent to banks and financial institutions will be made available at a policy rate of 7 percent," the Bank said through the monetary policy review. The liquidity facility, which was previously 8.5 percent, is now available at an interest rate of 7 percent.
Even though the interbank interest rate has reached 4 percent, the banks did not reduce the interest rate of government bonds saying that the interest rate of the liquidity facility provided by the Bank is expensive.
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