Monetary policy to focus on controlling inflation and managing interest rates
Mr. Trilochan Pangeni is currently the spokesperson of Nepal Rastra Bank. He had joined Nepal Rastra Bank (NRB) in 1987 AD. He has worked in various departments of the NRB including the leadership role at Research Department, Foreign Exchange Department and Banking Regulation Department.
- When will the monetary policy be released?
The work on monetary policy is being carried out at present. If monetary policy is prepared by Ashad, then we will release it in Ashad else we will release it by Shrawan first week.
- As the budget seems expansionary, will the monetary policy be tight this time?
We cannot say the budget for Fiscal Year 2073/74 as expansionary. The government will be implementing budget plans from the revenues collected. If that is not enough, then the government will be taking a modest loan from Nepal Rastra Bank. Nepal Rastra Bank Act already has a provision regarding the limit of the loan that needs to be provided to the government by central bank. The government cannot take as much loan as they want to.
At present we have excess liquidity in the country. The Central Bank alone cannot handle the situation of excess liquidity. The government will be utilizing the excess liquidity by the means of internal loan.
It is the work of the central bank to manage liquidity and stabilize the economy. Excess liquidity will be managed by central bank through monetary policy. The main focus of monetary policy will be to control byproducts of excess liquidity. The monetary policy this year will be focusing on controlling inflation and managing interest rates.
- Will the monetary policy bring some tightness in the provision of loan against shares?
The provision of loan against shares has already been regulated. Actions will be taken against bank and person if someone is caught taking loan under different heading and utilizing it somewhere else or in share market.
We don’t have any plan to bring any sort of changes in the provision of loan against shares.
- The remittance is in a downward trend. Will it bring decline in economic growth rate?
It is a topic of discussion whether the decline in remittance will bring decline in economic growth rate or not. Remittance growth, liquidity in the banking sector, investment of banking sector and economic growth due to investment- everything moves in a pattern.
At present we already have excess liquidity so even if remittance declines by some percentage, we won’t have risk in our economy.
The decline in remittance won’t bring decline in economic growth rate as the budget has already been released. The internal loan will be utilized through the budget.
- What is your view on the growth of Share Market?
There are different indicators of Economy and Share Market is one of them. The growth in share market is the reflection of the positive outlook of the investors. Share market has evolved as a good investment opportunity for both small and big investors. It has emerged as a good economic indicator to put the country in a positive line.
6. Why has Nepal Rastra Bank not provided approval to start trading of Prabhu Bank, Machapuchchhre Bank Limited and Janata Bank Limited?
It is due to some legal provisions and the process is being carried out.