Former Governor Maha Prasad Adhikari has said that the upcoming monetary policy will be flexible because the country’s overall economic foundation is strong.
On Sunday, while speaking at the Finance Committee of House of Representatives, former Governor Adhikari shared his views about the upcoming monetary policy. He said that there is no need to make the policy tight because price stability and external sector are in satisfactory condition.
Policy Will Be Predictable
He explained that monetary policy is highly technical and mostly predictable. The direction of policy is decided by internal economic situation and the external sector. According to him, Nepal Rastra Bank does not have any reason to tighten bank rate, policy rate, or interest rate corridor right now. He also mentioned that monetary policy is made after high-level technical analysis and deep discussions inside the central bank.
No Need to Remove Production-Oriented Policies
Former Governor also said that the old policies brought for increasing internal production and improving economy should not be removed just for the sake of making things easy. Currently, the banking system have plenty of liquidity and Nepal is receiving about Rs. 2.5 kharba remittance every month.
He warned that if we remove these good policies now because of high liquidity, it will be very difficult to bring them back in future. He suggested that the monetary policy should focus mainly on economic 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.
