Nepal Rastra Bank Unveils 25th Monetary Policy for FY 2083/84 with a Focus on High Economic Growth and Price Stability

Nepal Rastra Bank (NRB) has officially released its 25th annual monetary policy for the fiscal year 2083/84, maintaining a cautiously flexible stance to support the government's ambitious economic targets. The central bank aims to facilitate the government's goal of achieving a 7.0% economic growth rate by ensuring adequate monetary liquidity and managing foreign exchange efficiently. To back this up, NRB intends to maintain enough foreign exchange reserves to cover the import of goods and services for at least seven months.

On the inflation front, the policy projects to keep price hikes within 5.5% for the upcoming fiscal year. While average inflation for the first ten months of the current fiscal year stood at a low 2.66%, yearly inflation spiked to 5.04% by May 2026 due to rising global fuel and food prices. NRB expects this supply side pressure to continue for a few more months before easing up by the final quarter of the fiscal year.

To keep business costs predictable and boost private sector confidence, the central bank has left its key interest rates unchanged, including the policy rate, bank rate, and the deposit facility rate. Existing regulatory rules like the cash reserve ratio and statutory liquidity ratio will also remain the same. However, realizing that some banks are facing pressure from rising non-performing loans (bad debts) and shrinking capital funds, NRB has pledged strict monitoring to safeguard financial stability.

Additionally, the central bank announced plans to simplify existing banking directives, particularly regarding loan flows, interest rates, and customer protection. New rules will be introduced to ease the loan-to-value ratio for large electric vehicles used as public transport and restructure bad loans in sick industries. NRB will also study the possibility of introducing a peer-to-peer lending system based on individual credit scoring.