KATHMANDU, Dec 31: Stating that existing savings of the country was not adequate to meet the capital and loan demands of the country, a senior official of the Nepal Rastra Bank (NRB) has opined that financing from international sources was a must to address the current shortage of loan-able funds in the country. 

Speaking at an interaction on 'Implementation of Monetary Policy and Interest Rates Volatility' organized by Society of Economic Journalists-Nepal (SEJON) in Kathmandu on Sunday, , Nara Bahadur Thapa, an executive director at the NRB, said that international aid, foreign direct investment and borrowing from foreign banks could help in meeting the shortfall of financial capital in the country.

“The financial capital and investment required in the country come from the savings. However, our saving is not adequate to meet the growing demand for investments,” said Thapa, who heads the Public Debt Management Department of the NRB, calling for more foreign investments to meet the gap between financial resources and demands for financial capital. 

Such flow of foreign funds will help to address the shortage of lendable fund in the banking system, according to Thapa.

Earlier in April, the NRB paved the way for commercial banks to borrow from foreign bank and financial institutions (BFIs) to make sure that priority sectors do not face shortage of resources.

He also said that addressing the situation of ultra-low short-term interest rates, but higher long-term interest rates has been one of the challenges of the monetary policy.

 
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