The Nepal Rastra Bank is offering a repo (repurchase agreement) to inject Rs 10 billion into the banking system.
The repo to be effective tomorrow and matured from October 28 is taking place in the wake of a liquidity shortage taking place. Financial institutions categorized as ‘A’, ‘B’ and ‘C’ can bid for the repo.
Under the pretext of liquidity crunch, financial institutions lately increased interest rates up to double-digit to attract deposits.
However, the Nepal Rastra Bank on Tuesday intervened issuing a three-point direction for the financial institutions to slash interest rates. Earlier on October 6, the NRB floated a 14-day repo to inject Rs 20 billion into the banking system.
