NCC sits on seesaw over new Monetary Policy

Kathmandu, October 2:

Nepal Chambers of Commerce (NCC) today issued a press statement to express its mixed reaction regarding the monetary policy 2008-09.

It said that the Cash Reserve Ratio (CRR), which was earlier five per cent and has now been increased to 5.5 per cent, could create a negative impact on the business sector as it would hike interest rates on business loans.

NCC, however, welcomed the policy for its financial inclusiveness and focus on rural micro finance. “By initiating rural savings programmes and promotion of micro enterprises, it has tried to create a good environment in the rural finance sectors,” it said.

Still, it does not believe that the Monetary Policy can control inflation as the policy has no hold over the price of petroleum products.

The new policy on more investment from development banks and finance companies in the impoverished sector that has been increased is also a good move, said NCC. The policy has no plans for decreasing the Nepal-India trade deficit which stands at Rs 105 billion, NCC complained.