Half-yearly review of monetary policy not as expected by capital market investors: Share investors

Published On: February 13, 2023 02:00 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 13: Investors have said that Nepal Rastra Bank's half-yearly review of the monetary policy of the current fiscal year has not met the expectations of the capital market investors.

In the review of the monetary policy announced by Nepal Rastra Bank (NRB) on Friday, they complained that they expected the policy problems seen in the capital market to improve, but it did not meet their expectations. The investors demanded that the limit of 40/120 million applied to share margin securities in the last fiscal year's monetary policy be abolished.

However, although the limit of 40 million rupees was abolished in the monetary policy of the current fiscal year, the limit of 120 million rupees remained, and it is expected to be removed in the half-yearly review of the monetary policy. They accused NRB of neglecting the stock investors by not addressing their concern.

Ambika Prasad Paudel, a former chairman of Nepal Investors Forum and a capital investor, said that NRB ignored the demand of capital investors even in the half-yearly review of the monetary policy. He complained that despite the expectation and interest of the common investors that the policies introduced when the economy was under pressure will be reviewed when the situation gets better, it is not as expected.

He mentioned that he believes that when NRB makes a procedure to encourage the institutional investors of Nepal's stock market, it will address the demand of share investors as well. Paudel said that the presence of institutional investors in Nepal's capital market is low, as compared to individual investors; it is not even six to seven percent, so the government needs to encourage it.

He said that the 40/120 million policy did not affect individual investors. He said that the share market will not be affected as the capital market is now entering from a low point to a high point and there are a majority of individual investors. He said that the sustainable development of the capital market can only be achieved if NRB encourages institutional investors in the capital market through the monetary policy.

Likewise, Radha Pokharel, the president of Nepal Capital Market Investors Association, said that the half-yearly review of the monetary policy had neglected the share investors. She accused NRB of neglecting the share market when the share market investors made four demands. She met the finance minister and the governor demanding that the Rs 120 million cap be removed when 40 out of the 40/120 policy that they had put in place had been removed. She also said that she hopes to address the NRB guidelines saying that the risk-weighted average of 150 percent applied to share loans should be maintained at 100 percent. She said that the demand for the return of the system has been maintained as the share loan limit of 120 million by the investor associations has discouraged the stock market. Pokharel said that since the existing interest rate has become high and investment has become discouraged, the interest rate should be reviewed and brought to a single digit figure.



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