Kathmandu, Nepal (BBN) – The Nepal Rastra Bank (NRB), the country’s central bank, has announced a cautiously tight monetary policy for fiscal 2008-09 aiming to curb inflationary pressures on economy.
Under the new policy, the commercial banks will have to maintain 5.5 per cent cash reserved ratio (CRR) instead of the existing 5.0 per cent with the central bank.
The change in the CRR rate is expected to mop up Rs 1.92 billion worth of liquidity from the country’s banking system, according to the policy, released on Monday.
Besides, the bank rate has been increased to 6.50 per cent from 5.25 per cent.
The central bank has taken a number of measures such as increasing the bank rate from existing 6.25 to 6.5 per cent; increasing CRR from 5.0 to 5.5 per cent and announcing willingness to intervene in the open market to manage the liquidity to combat the inflationary pressures, Acting Governor of the NRB Krishna Bahadur Manandhar told local media.
BBN/SI/SS/AD-01October08-3:15 AM (BST)