With liquidity in the market not expected to decrease any time soon, the NRB is once again planning to withdraw funds through bonds for a period of one year.
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Nepal Rastra Bank is going to withdraw 35 billion rupees from the market through bonds on Tuesday. The amount is going to be collected through Nepal Rastra Bank Bonds 2084-A.
According to the notice issued by the Rastra Bank for this, banks and financial institutions had asked for bidding by 3 pm on Tuesday. Along with this, the Rastra Bank has already withdrawn about 200 billion rupees for one year through bonds last December.
Since liquidity in the market is not expected to decrease immediately, the Rastra Bank is going to withdraw money again for one year through bonds. Earlier, it has been withdrawing money from the market through deposit collection devices 2 days a week.
The interest rate of the bonds issued by the Rastra Bank will be determined through bidding and interest will be paid every 6 months. The principal of the bonds will be repaid after one year. Only banks and financial institutions (counterparties) of category 'A', 'B' and 'C' licensed by Nepal Rastra Bank will be allowed to purchase the bonds.
Investors will be able to bid on the bond with a minimum of Rs 50 million and a maximum of Rs 50 million, with the remainder going to the bank. The Nepal Rastra Bank has stated that this bond can also be used to take loans from banks and other banks and financial institutions by pledging it as collateral.
