KATHMANDU, Jan 12: In response to excess liquidity in the market, Nepal Rastra Bank (NRB) has decided to mop Rs 40 billion from the banking system. The mopping will take place through a bidding process today.
The amount will be absorbed so as to return it along with interest on February 2. The NRB plans to absorb the excess liquidity via regular deposit collection and will withdraw the funds through bidding for a 21-day period, as outlined in a notice issued by the central bank.
NRB to mop additional Rs 40 billion from banking system for liq...
The funds will be taken from the accepted bids by debiting the accounts of the concerned counterparties at the NRB. If the total bid amount exceeds the available amount, the funds will be distributed on a prorata basis, based on the interest rate.
Last Wednesday, the NRB invited bids to absorb liquidity of Rs 80 billion, but applications were received for only Rs 63.55 billion. The interest rate for deposits collected from banks and financial institutions will be determined through the bidding process, with the rate ranging from a maximum of 3 percent to a minimum of 2.98 percent.
According to the central bank, Rs 232 billion has been drawn through deposit collection, and Rs 64 billion has been kept through the fixed deposit facility.
