Monetary policy's primary goal is to establish an industrial economic environment: NRB Governor Adhikari

KATHMANDU: Maha Prasad Adhikari, the governor of Nepal Rastra Bank (NRB), has stated that the goal of the monetary policy will be to create an environment favorable to industrial business. The Governor's adhikari stated this at a session hosted by the Economic Media Association Nepal (EMAN) in Kathmandu on Thursday.

He also stated that, as in the past, the next monetary policy will be designed to maintain the banking sector's significant contribution to the economy. He stated, "There is a lot of expectation, aspiration, and interest in monetary policy." However, everyone understands that monetary policy has its limitations. We shall use monetary policy to its full potential.

He also stated that the Nepal Rastra Bank will set monetary policy in order to maximize the utilization of banking resources for production and job creation. He further stated that, while the growth rates in the construction and industrial sectors are negative, the growth rates in the hotel, tourism, and energy sectors are optimistic.

"Nepal Rastra Bank's objective remains focused on overall economic stability, stability of the financial sector and supporting the government's goal of economic development," Adhikari, its governor, stated. "We have to work hard to strengthen the external sector." He stated that policies should be made to benefit the private sector, and that if the private sector is strong, so would the banking industry.

Sunil KC, the CEO of NMB Bank and President of the Nepal Bankers Association, stated during his speech on monetary policy recommendations that Rashtra Bank's policies should be geared toward the development of the private sector because a healthy private sector will lead to a healthy banking sector.

According to Ram Bahadur Yadav, President of the Nepal Microfinance Bankers' Association (NMBA), the interest rate ceiling must be reviewed because it has caused problems for microfinance financial institutions. 'I recommend that the limit of the microfinance interest rate be made scientific,' he added. 'It is reasonable to base the microfinance interest rate on the spread rate or the base rate.'

He stated that it is vital to ensure that the debt restructuring facility is available not only to normal loan payers but also to distressed borrowers.

Karan Kumar Chaudhary, President of the NADA Automobiles Association of Nepal, has urged that the current capital loan standards be amended to bring the auto industry, which is on the verge of collapse, into a more comfortable situation. "Rastra Bank has reduced the average load through the third review and facilitated a lot," he stated.

The Federation of Hoteliers' president, Dinesh Kumar Chuke, insisted that since 60%  of hoteliers operate in rented houses, they ought to have easy access to financing. He suggested revising the ceiling to 25,000 rupees in light of the growing number of Indian tourists.