Nepal Rastra Bank is going to conduct a semi-annual review of monetary policy today. For this, the National Bank has called a meeting of the board of directors at 5 pm. There is a program to publicize the half-yearly review of the monetary policy after it is passed by the said meeting.
Governor Mahaprasad Adhikari's tenure is ending from next Chait 25. For this reason this review is the last of his term . Governor Adhikari, who introduced a tight monetary policy in the previous year, comparatively introduced a flexible monetary policy this year. However, due to the failure of the expected improvement in the financial policy, neither the demand for credit increased nor the expected improvement in the financial sector as per the objective of the monetary policy . In the first review, Rastra Bank did not make any significant changes in the policy as it had introduced a flexible monetary policy in the beginning .
It is expected that the outgoing Governor Adhikari will loosen some policy arrangements . However, higher officials of Rashtra Bank say that they are not going to make loose arrangements as expected. "FATF has placed Nepal in the gray list". "Nepal has committed to fully implement the condition of stricting some financial policies to remove it from the list," said an official of the National Bank, "because of this, in some cases, even if the governor wants to, it may not be possible to make it very flexible." For this reason, the presidents of the banks have demanded to amend the existing arrangement regarding the classification of bad loans, to increase the limit of five percent in bad loans.
