The Nepal Rastra Bank (NRB) moved on Thursday, October 29, to withdraw Rs 150 billion from the financial system for eight days to manage excess liquidity, which Onlinekhabar reported has climbed to Rs 1.386 trillion. Rising deposits and remittance inflows alongside weak credit demand have driven the surplus, and the central bank's policy is to keep the interbank interest rate from falling below 2.75 percent. Earlier in the week, the Public Debt Management Office postponed a Rs 10 billion Treasury bill auction scheduled for Monday, October 26, after technical failures in its Debt Management and Operation System, which was then undergoing maintenance.
Despite the liquidity surplus, commercial banks lent more in the first quarter of the current fiscal year. According to the Nepal Bankers’ Association, the 20 commercial banks disbursed about Rs 141 billion in new loans between mid-July and mid-October, raising their total loan portfolio to Rs 5.430 trillion. Global IME Bank and Nabil Bank led this growth, while Prabhu Bank, NIC Asia Bank and Sanima Bank reported portfolio declines.
1 article
The Nepal Rastra Bank is withdrawing Rs 150 billion to manage excess liquidity, even as commercial banks report a rise in loan disbursements.
Read the full report
