KATHMANDU, DECEMBER 14
Nepal Rastra Bank Governor Maha Prasad Adhikari has said that the banks and financial institutions will face more liquidity crunch in the month of Poush (mid-December to mid-January).
Addressing the 13th annual general meeting of the Nepalese Association of Financial Journalists (NAFIJ) here today, Governor Adhikari said that the BFIs will likely face some liquidity crisis next month as about Rs 30 billion worth of internal loans will deposited in government treasury on the basis on regular calendar.
"Moreover, in the same period last year, the NRB had refinanced loan worth Rs 60 billion and it is maturing at the end of next month and some funds will be transferred to the government account through taxes as it will be the end of the second quarter of the financial year. Thus, the liquidity situation will be under some pressure next month," he added.
Stating that the central bank is working on easing liquidity situation, he emphasised the necessity of recycling credit flow in the market.
"Last year, we injected Rs 97 billion in the market whereas in the current financial year, we have provided Rs 105 billion, which shows that the central bank is continuously working to ease liquidity crisis," he informed.
"Nevertheless, there is still liquidity crunch primarily because ours is an import-based economy, which has resulted in negative balance of payments."
Likewise, stating that the private sector and government are two wheels of a cart, Finance Minister Janardan Sharma said that the government and the private sector should collectively solve the economic woes.
"Opposed to the general misconception, the government has always treated the private sector as its integral part and the economic transformation is only possible if both the government and private sector work together," he added Minister Sharma suggested that the private sector focus on import substitution by engaging in the productive sector.
Chandra Dhakal, senior vice-president of the Federation of Nepalese Chambers of Commerce and Industry, pointed out that lack of coordination among various ministries is hindering economic prosperity.
A version of this article appears in the print on December 15, 2022, of The Himalayan Times.
