According to Federation of Nepal Chamber of Commerce and Industry, the monetary policy announced by Nepal Rastra Bank for the financial year 2082/83 is expected to accelerate the economy.

The federation has also pointed out that the monetary policy introduced by Nepal Rastra Bank Governor Vishwanath Paudel needs further reforms to increase targeted investment and risk management in the financial sector.

In the monetary policy, the fixed exchange rate of Nepalese rupee with the Indian rupee has been taken as a constraint of the monetary policy, and since it has been kept as an interim target, it is necessary to keep the fixed exchange rate as a safeguard in international trade.

"The bank rate, which is the upper limit of the interest rate corridor, has been reduced from 6.5 percent to 6 percent, the deposit collection rate, which is the lower limit of the interest rate corridor, has been reduced from 3 percent to 2.75 percent, and the policy rate has been reduced from 5 percent to 4.5 percent," the federation said in a statement.

It is mentioned in the monetary policy that the 'Nepal Rastra Bank Foreign Investment and Foreign Loan Management Regulations, 2078' will be amended to facilitate the growth of foreign investment. There has been an arrangement to facilitate the repayment of principal, interest and dividends by foreign investors in Nepal. According to the federation, this will help attract foreign investment. "In the context that foreign investment is only 0.2 percent of the gross domestic product, these and similar facilitation arrangements should be implemented immediately," the statement said.

For the financial year 2082/83, the growth rate of detailed money providers is projected to be 13.0 percent and the growth rate of loans going to the private sector will be up to 12.0 percent. The federation said that only if the guidelines and circulars issued for the implementation of the monetary policy regarding the current credit flow of less than 8 percent can the issues demanded by the private sector be addressed, the credit flow will be according to the target and the economy will be able to gain the expected speed.

The limit of loans for the construction and purchase of private residential houses will be increased from 20 million rupees to 30 million rupees and the loan-to-value ratio for the construction and purchase of the first house can be maintained up to a maximum of 80 percent and in the case of others, a provision has been made in the monetary policy. According to the federation, it is expected to have a positive effect on the economy as it can attract the common people to buy houses.

"It is welcome that the guidance on current capital loans will be modified as needed based on the nature of business including agriculture, small and domestic industries, education, health, sports, communication and media houses and the loan repayment-income cycle," the federation said, "but since the nature of loans is different in all sectors, it would be appropriate to implement the suggestions given by the federation so that the banks and borrowers can make decisions on this matter." The federation believes that the guidelines will be more clear after the income as there is an arrangement to be reviewed as needed. In order to facilitate credit in agriculture, small, domestic, small and medium businesses, banks and financial institutions have introduced a system to provide agricultural or commercial loans up to 10 lakh rupees after evaluating the mortgage themselves. According to the Federation, it is positive that the provision of minimum loan loss during the grace period of loans of up to 10 lakh rupees, and the provision of loans of different durations and natures in harmony with the nature of production for the work related to agriculture, will be further simplified.