Speaking at a function Monday to mark the 54th anniversary of NRB, Governor Deependra Bahadur Kshetri said increasing public demand for such higher denomination notes has created the currency crunch in banks.
“We are in the process of printing new notes keeping in view the scarcity of notes of higher denominations,” Kshetri said. He said print orders for new notes have been placed to fulfill demands for three years and four months.
In the past NRB used to place orders to meet demand for notes for two years. “New notes in denominations of Rs 5, Rs 10, Rs 20, Rs 50, Rs 100, Rs 500 and Rs 1,000 are in the process getting printed,” added Kshetri.
Responding to the scarcity of notes in the market, NRB has increased currency notes in the market by Rs 30.49 billion to Rs 133.33 billion. In the past, demands for notes used to go up during major festivals such as Dashain and Tihar. Officials at NRB also conceded the supply crunch of higher denomination notes.
Meanwhile, the short-term market interest rate has gone up during the third quarter of this fiscal year. Last month, monthly average interest rate for 91-day treasury bills stood at 5.89 percent, up from 4.06 percent in the same month last year.
Meanwhile, NRB has stated that the tenure of the Financial Sector Reform Project has been extended until December 6, 2011.
NRB said it will continue to discourage willful defaulters in an attempt to reduce bad debts at Nepal Bank Ltd and Rastriya Banijya Bank. The central bank will continue to emphasize monitoring based on loan risk at banks and financial institutions.
Commercial banks have increased investment in the private sector by Rs 44.56 billion to Rs 381.34 billion.
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