Nepal | July 07, 2020

Monetary Policy to protect borrowers: NRB guv

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Nepal Rastra Bank Governor Maha Prasad Adhikari said today that the Monetary Policy for 2020-21 would provide relief to sectors affected by the COVID-19 crisis and would revolve around protecting borrowers from banks.

Stating that borrowers have been facing difficulties in repaying interest on loans since the market has remained shut for almost three months, Adhikari said the Monetary Policy would introduce measures to facilitate borrowers and businesses and give momentum to economic activities in the market.

“As the crisis caused by COVID-19 is a major challenge that the country’s economy is facing today, the Monetary Policy will concentrate on addressing challenges posed by the crisis.

In line with the growth projection made in the budget for the upcoming fiscal year, the Monetary Policy will introduce measures to support the government’s growth target of seven per cent in 2020-21 and keep inflation below seven per cent,” Adhikari told The Himalayan Times.

In a bid to facilitate businesses affected by the COVID crisis and to boost their morale, Adhikari said the Monetary Policy would defer loan and interest repayment deadline. Adhikari added that businesses would be provided relief based on the impact the crisis had on them.

“We have categorised sectors as highly-affected, moderately-affected and unaffected. The Monetary Policy will give optimum priority to the highly-affected sectors and businesses.

Not all sectors and businesses need the government’s support for survival and revival,” added Adhikari.

He said the central bank had its own obligations and jurisdiction and would support businesses while remaining within its limits.

NRB is preparing to bring the Monetary Policy for the upcoming fiscal year in July. It is collecting recommendations and suggestions on the policy from stakeholders.

Stating that the budget did not fulfil their aspirations, the private sector has been pinning its hopes on the Monetary Policy to reduce interest rates on loans, restructure existing loans and provide adequate refinancing facility to businesses of all types.

A version of this article appears in e-paper on June 25, 2020, of The Himalayan Times.

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