Kathmandu, December 1

The private sector has asked Nepal Rastra Bank (NRB) to ensure that the interest rates on lending remain stable in the market. Citing that interest rate volatility is the major factor hindering business growth, they sought effective intervention from the central bank on this front.

Addressing a programme today, Shekhar Golchha, senior vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said, “We have been raising the interest rate issue since long as the rates in the banking sector today are not based on the principle of open market economy. Thus, it is time now for the central bank to regulate interest rate volatility in the banking sector as high and unpredictable interest rates discourage businesses and investors.”

Golchha, who is set to become the president of FNCCI, said that the federation under his leadership will fight to make interest rate stable in the domestic market and promote business growth. “Our products can be competitive only if interest rates are lowered. As Nepali products cannot compete with foreign products in terms of price, our export base is very low,” he informed, adding that stable policies of the government and predictable interest rates will help boost the export sector.

Similarly, Satish Kumar More, president of the Confederation of Nepalese Industries, said that the government’s policies should be encouraging for investors to operate businesses instead of tightening them. “As the private sector is major player behind economic growth and prosperity, government’s policies should be friendly to doing business. Similarly, the government should guarantee safety and security to foreign investors in a bid to bring in mega foreign investments,” he stated.

Meanwhile, NRB Governor Chiranjibi Nepal said that NRB has been coordinating with the private sector while introducing and enforcing new policies. “The central bank is concerned with the interest rate issue. However, the bank interest rates cannot be brought down overnight and to the level sought by the private sector,” he mentioned.