Decrease in Interbank Interest Rate Indicates Heightened Liquidity in Nepal's Banking System

The banking sector in Nepal has observed a decline in the interbank interest rate, signaling an increase in liquidity. Recent data from Nepal Rastra Bank reveals that the interbank interest rate of banks has fallen below 1 percent. Specifically, on Ashad 27, the interbank interest rate remained steady at 0.83 percent.

Concurrently, the average CD (Cash Deposit) ratio on Ashad 27 witnessed a decline to 81.67 percent, in comparison to the 82.11 percent recorded on Ashad 25. This reduction in the CD ratio is a result of an additional infusion of Rs. 23 Arba into the banking system.

As of Ashad 25, the cumulative deposits held by banks and financial institutions amounted to Rs. 57.13 Kharba. By Ashad 27, this figure had risen to Rs. 57.36 Kharba. Furthermore, the credit investment of banks stood at Rs. 48.51 Kharba.