The IMF has praised the monetary policy adopted with the aim of maintaining high economic growth and overall macroeconomic stability.
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The Nepal-India Chamber of Commerce and Industry (NICCI) has welcomed the monetary policy for the fiscal year 2083/84 made public by Nepal Rastra Bank.
NICCI has praised the monetary policy for adopting the objective of maintaining high economic growth and macroeconomic stability. According to the Chamber, despite global economic uncertainties, improvements have been seen in Nepal’s external sector, liquidity in the banking system, foreign exchange reserves, and investor confidence, which have laid a positive foundation for economic expansion in the coming fiscal year.
The Chamber believes that the decision to keep the policy rate unchanged, maintain adequate liquidity in the banking system, and ensure the stability of the exchange rate with the Indian rupee—with the aim of limiting inflation to around 5.5 percent and supporting 7 percent economic growth—will create a more credible environment for business and investment.
The Chamber has also welcomed provisions to make financial sector reforms, simplification of banking regulations, expansion of digital banking, credit assessment systems, loan recovery arrangements, and foreign exchange management more effective. However, despite adequate liquidity and low interest rates in the banking system at present, credit expansion to the private sector has not met expectations. This shows that the main challenge for investment is not a lack of financial resources, but rather investor confidence, policy stability, regulatory complexity, and the implementation of economic reforms.
The Chamber has emphasized that, along with monetary policy, financial discipline, effective implementation of development expenditure, a business-friendly environment, and structural reforms are necessary for sustainable economic growth. NICCI has specifically called for increased investment in productive industries, hydropower, tourism, agriculture, information technology, and export-oriented industries; attracting domestic and foreign investment; simplifying the investment approval process; channeling available liquidity into productive sectors; promoting exports; and prioritizing infrastructure and cross-border trade facilitation.
The Chamber, viewing the improvements in private investment, remittances, foreign exchange reserves, and foreign investment as positive signals, has stated that Nepal has the opportunity to move from a consumption-based economy toward an investment- and production-based economy.
Highlighting the great potential in production, energy, tourism, trade, and investment due to the close economic relationship between Nepal and India, the Chamber has expressed confidence that stable policies and reforms will further strengthen the economic partnership between the two countries. The Chamber has also expressed its commitment to continuously cooperate with Nepal Rastra Bank, the Government of Nepal, Indian investors, and the private sector in investment, industrial development, trade facilitation, and policy reforms. Furthermore, the Chamber believes that if the monetary policy is implemented effectively, development expenditure is mobilized on time, and coordination among relevant agencies is achieved, Nepal can attain sustainable, high, and investment-oriented economic growth.
