Nepal Rastra Bank Implements Liquidity Measures, Updates Government Cash Balance, and Reports Cash Mobilization in Market
In a series of developments, Nepal Rastra Bank (NRB) is taking steps to manage liquidity in banks and financial institutions, while also providing an update on the cash balance in the government treasury and cash mobilization in the market.
Nepal Rastra Bank is withdrawing Rs. 20 Arba from banks and financial institutions today:
The Nepal Rastra Bank (NRB) has initiated measures to address the liquidity build-up in banks and financial institutions. Today, on the 10th of Ashad, the central bank is conducting a withdrawal of Rs. 20 Arba rupees from banks and financial institutions through reverse repo. A one-week reverse repo worth Rs. 20 Arba is being issued, and interested investors, banks, and financial institutions can submit their applications before 3 pm.
Previously, on Ashad 7, a reverse repo of Rs. 10 Arba was issued, resulting in applications amounting to Rs. 26 Arba, surpassing the demand by Rs. 16 Arba. This indicates a situation of high liquidity in the banks but a lack of investment opportunities. Recent statistics reveal that out of the total deposits of Rs. 55.71 Kharba, only loans worth Rs. 48.56 Kharba were invested.
Due to the further accumulation of liquidity in the banking sector, the central bank plans to withdraw Rs. 30 Arba through reverse repo within a week.
Rs. 1.66 Kharba in the account of the government:
The cash balance in the government treasury has experienced a decline. As per the Nepal Rastra Bank, by the end of Jestha in the current financial year, the total cash deposited in all banks and financial institutions amounted to Rs. 1 Kharba 66 Arba 26 crores 47 lakhs. This includes funds from the central, provincial, and local governments.
Compared to the previous year, the bank reports a decrease in deposits by Rs. 59 Arba 24 crore 21 lakh. During the financial year 2078/79, at the end of Ashad, such deposits had reached Rs. 2 Kharba 25 Arba 50 crores 68 lakhs. Additionally, the surplus balance from the previous year declined to Rs. 2.7 Arba, as stated by the NRB. In the preceding year, the surplus had amounted to Rs. 11 Arba 7 crores.
Cash mobilization of Rs. 6.8 Kharba in the market:
According to the NRB, a total of Rs. 6.8 Kharba in cash is currently being mobilized in the market. The central bank, in its report until the end of Jestha, states that the overall cash circulation in the market amounts to Rs. 6 Kharba 8 Arba 51 crore 59 lakh 69 thousand 273 rupees.
This figure is Rs. 3 Arba 51 crores and 16 lakhs lower than the previous year. As of the end of Ashad in the financial year 2078/79, the cash circulation stood at Rs. 6 Kharba 12 Arba 2 crores 76 lakhs three thousand and 970. The reduced amount of money is subsequently returned to the banking channel.
Authored by Praisha Shrestha
