Deposit Call by the NRB oversubscribed 2.5 times; interest rate plunges to 0.59%

ShareSansar, September 17:

The deposit collection of the NRB has been been oversubscribed by 2.5 times.

The deposit call floated by the NRB on Tuesday of Rs 10 arba drew bids worth around Rs 25 arba.

According to a high level official at the Nepal Rastra Bank, the central bank received bids from 31 banks and financial institutions.

The weighted interest rate of the deposit has been fixed at 0.585 percent. The interest rate of the deposit of the money is fixed through the auction.

 While the subscription is higher than the amount of last time when the NRB called for Rs 20 arba from the BFIs, the interest rate went down compared to the last rate.

The weighted average interest rate was fixed at 0.6911 percent last time.
 
With this deposit call, the NRB has now absorbed Rs 30 arba from the BFIs who are grappled with the excessive liquidity.

In a bid to mop up the excess liquidity from the banking system, Nepal Rastra Bank (NRB) has introduced the instrument call ‘term deposit’ in the monetary policy of fiscal year 2071/72.

Unlike reverse repo which has a maturity period of only one week, term deposit has a maturity period of three months.

Earlier on last month, the central regulatory bank had absorbed Rs 20 arba from the banks and financial institutions which has drawn 225 bids worth Rs 38.15 arba from 25 BFIs.