‘Monetary police should support real sector’

Kathmandu, June 20

Prakash Kumar Shrestha, a member of the National Planning Commission (NPC), stressed the need for a monetary policy that supports the expansion of the real sector.

Speaking at the two-day ‘Advanced Banking Training for Economic Journalists’ organised by Nepal Association of Financial Journalists (NAFIJ) with the support of Nabil Bank in Kathmandu on Friday, Dr. Shrestha said that expansion of the real sector is essential for economic prosperity.

He noted that the banking sector has also begun to feel the effects of the ongoing economic slowdown. “The inability to expand the real sector has started affecting the banking sector as well. Therefore, the real sector needs to be further expanded,” said Dr. Shrestha.

He emphasised that the forthcoming monetary policy for the Fiscal Year 2025/26 should be designed to stimulate credit demand.

“Currently, banks still have approximately Rs. 700 billion in lendable funds. The new monetary policy should be introduced in a way that boosts credit demand,” he said. He added that if the industrial sector becomes more active, credit demand would naturally increase.

The Nepal Rastra Bank (NRB) is currently preparing to formulate the monetary policy for the upcoming fiscal year. Dr. Shrestha suggested that the policy should facilitate greater credit access for enterprises.

He also pointed out that insufficient government spending has suppressed domestic borrowing demand. Highlighting the disruption in the government’s spending cycle, he suggested that the government needs to improve its fiscal spending and increase domestic borrowing accordingly.

Likewise, Deputy Governor of the NRB, Bam Bahadur Mishra, highlighted the growing need for accurate information, stating that since the economic and financial sectors are highly sensitive, reporting must be based on correct information.

“The challenge now is to disseminate correct information in society without spreading misinformation,” he said, advising journalists to base their reports on facts and truth.

Given the sensitivity of the banking sector and how quickly misinformation can have an impact, Mishra urged journalists to communicate only accurate information. He said that since the financial sector plays a critical role in the economy, any misinformation affecting it could have a negative impact on the overall economy.

Published in The Rising Nepal daily on 21 June 2025.