KATHMANDU, Nov 11: In an attempt to ease a growing shortfall of liquidity in the banking system, Nepal Rastra Bank (NRB) is injecting an additional Rs 20 billion in the domestic financial system on Thursday.
According to NRB, it is issuing a repo worth the given amount through the bidding process for the next two weeks. Banks can bid the interest rate within the limit of 5 percent to purchase repo to be issued by the central bank.
Amid severe crunch of loanable funds, 24 commercial banks on Tuesday alone received Rs 51.82 billion from the central bank by utilizing the standing liquidity facility. On the pretext of an increasing pressure of falling liquidity in the banking system, banks and financial institutions have already started raising their interest rates on both deposits and loans.