Kathmandu, June 25
"The NRB should also design
its monetary policy in a way that it would support in achieving the 6.5 per
cent growth rate next year," he said speaking at a virtual discussion on
the monetary policy of the next FY organised by Management Association of Nepal
(MAN) on Friday.
However, policies and programmes
designed to address these two important aspects of economy will certainly create
pressure on price stabilisation, said Adhikari.
He maintained that the NRB was
studying the situation and the possible measures to create balance between these
mutually contradictory aspects.
According to the governor, while
the central bank was expecting that the situation would have moved to revival
now, but the financial condition was not much encouraging.
"There is pressure on the
balance of payment as about Rs. 25 billion to Rs. 30 billion is consumed in a
month. Current account deficit has reached Rs. 250 billion. Liquidity situation
is not comfortable," he said.
Governor Adhikari also said that
the central bank has taken the ideas like differential interest rates for
manufacturing and other business sectors positively.
Speaking on the occasion, President of Nepalese Chambers of Commerce and
Industry (FNCCI), Shekhar Golchha said that economic recovery was subject to
the country's ability to check the spread of virus and save people from it
through vaccination.
"In
normal situation, private sector has more interest in fiscal policy but the
pandemic has forced us to turn to the central bank in a hope to get economic
relief and rehabiliation support via Monetary Policy," he said.
Golchha
stated that tourism, hospitality and advertising are the most affected business
sectors and the NRB should facilitate them in obtaining business continuation
loan, refinancing and other discounts.
He
also said that the concept of project financing should be applied as soon as
possible.
Satish
Kumar More, President of Confederatio of Nepalese Industries, suggested the
central bank to raise the limit of refinancing to 20 per cent of the business
exposure size from the current up to 20 per cent of the loan obtained.
Foremer
Executive Director of the central bank and chairman of Nepal Bank Limited
Basudev Adhikari recommended to redesign and reform the deprived sector
lending. "It shold be rebranded in the name like the micro, small and
medium enterprises (MSME) lending. This sector should also be digitalised at
the earliest," he said.
Professor
of Economics Dr. Ram Prasad Gyanwaly said that since most of the economic and
trade activities of Nepal happen with India, the former should take Indian
monetary system and rates into account.
He
also suggested incrasing the Cash Reserve Ratio (CRR) at the banks and
financial instutions (BFIs) to 4 per cent from the current 3 per cent.
Reeta
Simha, President of Federation of Women Entrepreneurs Associaions of Nepal (FWEAN),
demanded special loan facility for women entrepreneurs. The business body has
been making this demand since the lockdown last year.
"The
central bank should help women entrepreneurs upscale their business and
enterprises. The documentation process should be simplified," she said
while suggesting to design economic promotion package for returnee women
migrant workers.
Pradyuman
Pokharel, President of Development Bankers Association, said that the
development banks should be allowed to increase their paid up capital through
the issuance of right shares.
They
should have the opportunity to manage government funds and mobilse deposits of
financial institutions like Citizen Investment Trust and Employment Provident
Fund, he said.
Ramesh
Kumar Pokharel, former Executive Director of NRB, said that there was a
challenge in implementing non-traditional and relief oriented programmes in a
financial system dominated by commercial banks and collateral based lending.
Published in The Rising Nepal daily on 26 June 2021.
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