Kathmandu, June 22

The private sector representatives said today that the Monetary Policy for the upcoming fiscal year should be based on ‘reduce, restructure and refinance’ principle and help businesses hit by the COVID-19 revive through effective monetary and financial measures.

Addressing a virtual interaction on the private sector’s concerns in the Monetary Policy for fiscal year 2020-21, Saurabh Jyoti, chairman of the Bank, Finance and Insurance Committee of the Federation of Nepalese Chambers of Commerce and Industry, said that the Monetary Policy should reduce interest rate, restructure existing loans and provide adequate refinancing facility to businesses of all types.

He suggested the Nepal Rastra Bank (NRB) to reduce interest rate on loans to at least 7.5 per cent by raising the credit to core capital plus deposit (CCD) ratio by five percentage points to 85 per cent and reducing the statutory liquidity ratio (SLR) to eight per cent from the existing 10 per cent.

Similarly, Jyoti said that existing loans should be restructured for the next two years while interest rate payment period should be deferred by next six months. Likewise, the refinancing loan facility availability should be ensured and made accessible, he mentioned.

On the occasion, Kamalesh Agrawal, vice-president of the Confederation of Nepalese Industries, said that the central bank should reduce the interest rate on loans to a single digit, bring down spread rate to four per cent from 4.5 per cent, make calculation method of base rate more contextual, issue refinancing loan at three per cent interest and raise the size of the refinancing fund.

“The Monetary Policy should be expansionary in nature and focus on the revival of businesses and economy,” he said.

Meanwhile, Radesh Panta, former chief executive officer of Investment Board Nepal, said that the NRB should mobilise available monetary and financial tools to give momentum to economic activities in the market, which is crucial to promote business growth and investment.

A version of this article appears in e-paper on June 23, 2020, of The Himalayan Times.