Economy on recovery course: Governor Adhikari

Kathmandu, Apr. 27

Governor of the Nepal Rastra Bank (NRB), Maha Prasad Adhikari, said that the major economic and financial indicators including liquidity have improved in the recent few months.

Addressing the programme organised on the occasion of the 68^th Anniversary of the NRB, he said that inflation has caught a downward trend, and interest rates have been moderated which has given a relief to the entrepreneurs and businesses. This has created a positive impact on the economy and increased the confidence of the entrepreneurs.

Inter-bank rate has come down to 7.0 per cent from 8.5 per cent with the central bank's provision to provide overnight liquidity facility at the policy rates. Meanwhile, favourable weather and availability of agricultural inputs is likely to increase the production, said the governor.

"There has been pressure on banks’ loan recovery in recent times, however the financial sector is safe as there is enough capital fund and risk has been minimized," said Governor Adhikari while maintaining that due to external reasons, the pressure on the prices would remain.

Meanwhile, he stated that the economic activities have been slowed due to poor capital expenditure and reduction in demand due to the increase in the interest rates. Yet, recently added additional about 400 megawatt of hydroelectricity and improvements in the tourism sector would give some relief.

Speaking on the occasion, former Governor of the central bank, Bijaya Nath Bhattarai, said that putting pressure on the Rastra Bank to cut interest rate was not appropriate. "The tendency of industrialists is the same as that of construction workers. Working capital loan should be spent in the areas for which the loan has been obtained," he said.

Bhattarai also said that there was still a need to establish a second-tier entity for the supervision of the banks and financial institutions. "It was an issue that was proposed since I was the Governor of the central bank more than a decade ago," he said.

The central bank felicitated Bhattarai for his contribution to the growth of economic, monetary and financial sector in the country. Governor Adhikari offered him shawl and appreciation letter.

On the occasion of its anniversary programme, the central bank awarded three best remittance companies and three banks for their job to bring in highest remittance. It felicitated IME Limited, City Express Money Transfer, and Pravhu Money Transfer in remittance company category. Likewise, it awarded Himalayan Bank Limited, Nepal SBI Bank Limited, and Global IME Bank Limited.

Likewise, two best digital payment companies – Nepal Clearing House Limited and Phone Pay Service Limited – were also awarded for their best contribution in the sector.

Similarly, it awarded its employees for their best service. Ram Nath Pundit was awarded with Rs. 100,000 for NRB Excellent Service Prize. Mani Raj Shrestha, Yasodha Pokhrel, Lal Kumar Subedi and Jhan Prasad Koirala were awarded with Rs. 50,000 each for NRB Best Service Prize. 

Published in The Rising Nepal daily on 28 April 2023.