KATHMANDU, March 20: Finance Minister Janardan Sharma has claimed that the liquidity crunch has been seen in the market due to the tendency to hide cash at home.
Minister Sharma also said that the trend of hiding money has increased in recent times. Addressing the 32nd Anniversary of the Citizen Investment Trust on Friday afternoon, he said that the tendency to keep money under the bed or under the pillow has increased to create a liquidity crunch.
“Capital is missing somewhere. Where is the money missing from the market? I'm looking to see if they are hidden under the pillow and under the bed,” he said. “Isn't our capital sitting idle?” He also said that a mechanism has been developed to curb export of capital by abusing new technologies including crypto currency, digital networking and hyper-funds.
He said that the process of capital fly has emerged by abusing various newly developed technologies. He said that the Ministry of Finance has been working continuously to control export of capital as the country has been facing the problem of liquidity crunch in recent times.
"I have been saying that bank interest rates should be business friendly. I have advised the Nepal Rastra Bank that the base rate of credit to the productive sector should not be more than 2 percent,” he said. He said that the liquidity problem will be solved in a few days as the deposits in the banking system are gradually increasing. He said that the current balance of payments deficit has affected the international market price.