KATHMANDU, July 18: The monetary policy for fiscal year 2021/22 that was supposed to come online on Sunday has been postponed with the formation of a new government.
According to the Nepal Rastra Bank (NRB) officials, the monetary policy has almost been finalized. “The possibilities of new priorities by the new government have delayed the enforcement of the policy,” said the source, requesting anonymity.
Last week, the Supreme Court through a mandamus reinstated parliament and paved the way for the formation of a new government. In the new scenario, the government is looking to amend the ordinance-based budget formulated by the KP Oli-led government. The monetary policy is also considered a complementary policy to aid the government’s targets in the budget.
According to NRB officials, the monetary policy for this fiscal year is likely to be enacted within a week after the government takes a concrete decision on the budget. Last year, NRB presented a monetary policy on July 17 that was mainly focused on providing relief to the sectors badly hit by COVID-19.
This year too, the monetary policy is likely to focus on giving continuity to refinancing, rescheduling and restructuring of the loans provided to these pandemic-affected industries. However, NRB will face additional challenges of managing liquidity along with extending the relief packages to the sectors that were taken down further by the second wave of the coronavirus, as the central bank has already utilized maximum limits of its regulatory space to curb the impacts of the pandemic since last year, according to experts.