Governor of Nepal Rastra Bank Maha Prasad Adhikari has said that the interest rate on investment will not increase immediately.
Governor Adhikari made the commitment during a meeting with a delegation of the Confederation of Nepalese Industries (CNI) on the eve of the first quarterly review of the monetary policy of the current fiscal year. He also claimed that policy arrangements would be made to promote industrialization by keeping interest rate stable.
Stating that the NRB has always been vigilant in keeping the interest rates of banks and financial institutions within the required limits, the official said that the NRB has issued new directives to reduce the unhealthy competition in the market. NRB expects the new policy to stabilize investment interest rates, the governor said.
During the discussion, Confederation President Bishnukumar Agrawal said that liquidity pressure was increasing in the market and banks were raising interest rates on deposits and this would increase interest rates on loans in the coming days.
The confederation has also urged the NRB to maintain the system of allowing the local governments to calculate the total amount deposited in the bank in the loan-to-deposit ratio for a certain period of time to reduce the liquidity pressure.
Through the current monetary policy, the NRB has brought a rule that commercial banks should maintain a 90 percent loan-to-deposit ratio when disbursing credit and accordingly liquidity is less than estimated. The Confederation has requested the Nepal Rastra Bank to issue clear instructions to be maintained.
