Acting Governor of Nepal Rastra Bank Kiran Pandit has stated that the upcoming monetary policy must balance high economic growth with economic stability.
Speaking at an interaction program organized by Society of Economic Journalists Nepal (SEJON) titled ‘Role of Monetary Policy in Driving Economic Growth’, Pandit said such discussions before bringing monetary policy help Nepal Rastra Bank to get good policy suggestions from stakeholders.
Balancing Growth and Financial Stability
He said that fiscal policy and monetary policy naturally have connections and sometimes even conflicts, but both policies should move ahead together in coordinate manner. He explained that while monetary policy should support to achieve high economic growth, it is also equally important to keep inflation, financial stability, and other economic indicators within desired limits.
Pandit made it clear that Central Bank designs policies by keeping its goals, bases of operating monetary policy, and mechanisms in mind. He mentioned that there are huge expectations in market regarding monetary policy and these expectations need to be managed very carefully. He also stressed on understanding difference between regulatory reforms and monetary policy.
He said there is a need to build clear narrative about policy decisions and regulatory systems related to banking sector. He added that a serious review is required on how loan restructuring and concessional facilities given during Covid-19 pandemic affected banking system and capital formation.
Digital Challenges and Public Gap
Acting Governor Pandit also pointed out the fast-growing digital challenges in financial sector. He said that Fintech, open banking, monitoring of digital transactions, and technology risk management have now become important agendas for monetary policy and regulatory framework. He feels continuous dialogue and subject-wise review is necessary for these changes.
Lastly, he said that the gap between policy-making level and general public must be removed. He noted that real needs of youth, farmers, and people at lower level do not reach policy-making level easily, and media can play big role to bridge this gap. According to him, such programs should continue as they expand dialogue between policy makers and stakeholders and provide useful suggestions for practical policy reforms.
AI Disclaimer: This article was originally published on https://bajarkochirfar.com. It has been translated with the help of AI. For the best understanding and accurate facts, we recommend reading the original Nepali version.
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