Nepal Rastra Bank to Collect NPR 1.25 Trillion to Manage Excess Liquidity

Nepal Rastra Bank plans to absorb NPR 1.25 trillion through a deposit collection process on Friday to control excess liquidity in the financial system. This move is targeted at commercial banks, development banks, and finance companies amid weak loan disbursement despite abundant liquidity. Excess liquidity can distort market interest rates, so this action aims to stabilize borrowing costs and maintain financial balance. The collected amount will be paid back with interest on 2nd Baishakh, 2083, ensuring a short-term liquidity adjustment. Investors should note that such monetary tools indirectly impact loan interest rates and financial market stability, which in turn affect investment returns and borrowing costs.

• NRB’s NPR 1.25 trillion liquidity mop-up targets stable interest rates amid weak loan growth.