Monetary Policy is positive and balanced: FNCCI, NICCI

 Kathmandu, July 8

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has termed the monetary policy for the upcoming Fiscal Year 2026/27 as 'positive and balanced', and said it would help boost the confidence of the private sector.

"The policy seeks to maintain a balance between price stability, financial sector stability and higher economic growth at a time when the country's economy is gradually improving," the business body said about the policy unveiled by the Nepal Rastra Bank (NRB) on Tuesday.

It said the policy recognises the decisive role of the private sector in achieving the government's target of 7 per cent economic growth as announced in the budget for the next year.

FNCCI President Anjan Shrestha said the flexible policy measures aimed at expanding private sector investment, increasing production, creating employment and stimulating economic activities were appropriate.

According to the FNCCI, several issues that it had been raising for a long time had been addressed in the policy. These include measures to remove unlimited liabilities arising from personal guarantees, manage non-performing loans of sick industries and revive stressed loans.

It also welcomed provisions to determine share-backed lending limits based on institutional capacity and to facilitate lending for large electric vehicles used in public transportation.

However, FNCCI stressed that the upcoming directives should clearly address the restructuring and rescheduling of loans for small, medium and large businesses, as well as sector-specific lending.

Likewise, the decision to keep the policy rate, standing deposit facility rate, bank rate, cash reserve ratio, statutory liquidity ratio and standing liquidity facility unchanged would help maintain policy stability, read the statement.

"The NRB's projection of a strong external sector, supported by adequate foreign exchange reserves, remittance inflows, tourism income and growth in service exports, would help stimulate the domestic economy," said the FNCCI.

However, it maintained that the success of the monetary policy would depend on its effective implementation. It called for easier and affordable credit flow to industry, agriculture, tourism, energy, information technology, infrastructure, export-oriented industries and small and medium enterprises to achieve the 11 per cent credit growth target and utilise excess liquidity in the banking system.

It further called for a more flexible approach towards loan classification and loan-loss provisioning, a two-year relaxation of watch-list and blacklisting provisions.

Meanwhile, Nepal-India Chamber of Commerce & Industry (NICCI) appreciated the Monetary Policy as the continuation of a cautiously accommodative monetary policy aimed at supporting higher economic growth while maintaining macroeconomic stability.

It welcomed the decision to maintain policy rates, continue the existing Interest Rate Corridor, preserve adequate liquidity in the banking system and maintain exchange rate stability with the Indian Rupee. "These measures are expected to sustain business confidence and create a more predictable investment environment," NICCI said in a statement.

It said that although the banking system currently possesses ample liquidity and historically low lending rates, private sector credit expansion remains relatively subdued. This indicates that the principal constraints are no longer the availability or cost of finance, but rather investor confidence, policy predictability, project readiness, regulatory bottlenecks and the pace of implementation of economic reforms, read the statement. 

Published in The Rising Nepal daily on 9 July 2026.