Governor of Nepal Rastra Bank, Prof. Dr. Biswo Nath Poudel, today presented the 59th monetary policy for Fiscal Year 2082/83 through a live broadcast on television and social media platforms. This announcement marks his initial significant declaration since taking on the role.
Key Highlights of the Monetary Policy for FY 2082/83:
1. The limit for foreign currency exchange for Nepali travelers has been raised from USD 2,500 to USD 3,000 per individual.
2. Banks and financial institutions may increase their capital as required, pending approval from Nepal Rastra Bank.
3. The cap for personal margin loans has been elevated from Rs. 15 crore to Rs. 25 crore.
4. Financial institutions can lend up to 70% of the lowest amount between the average market price or the average price over the last 180 days of shares.
5. A flexible and accommodating monetary policy approach has been embraced to assist the lagging economy.
6. The policy rate has been cut from 5% to 4.5%, and the bank rate reduced by half a percentage point to 6%.
7. The rate for deposit collection has been lowered from 3% to 2.75%.
8. Credit growth in the private sector is anticipated at 12% for the following fiscal year.
9. The government targets a GDP growth of 6% and aims to maintain inflation at 5.5%.
10. The limit for home loans for first-time buyers has been raised to Rs. 3 crore.
11. Financial institutions can now offer housing loans up to 70% of the property’s assessed value, increased from the previous 50%.
12. For those constructing or purchasing a home for the first time, the loan-to-value ratio may reach up to 80%.
13. Provisions permitting microfinance institutions to distribute yearly dividends exceeding 15% (cash or bonus) will be assessed.
14. Limitations on “Class C” national-level finance companies deploying deposits up to 15 times their primary capital will be eliminated.
15. The cap on non-deliverable forwards based on primary capital by banks and financial institutions will be lifted from 20% to 25%.
16. The accumulation of interest on loans provided to the energy production sector will be evaluated.
