NRB absorbing Rs 50 billion in 5 days to manage excess liquidity of Rs 122 billion

ShareSansar July 15:

‘Deposit Collection’ is an instrument whereby the central bank absorbs the liquidity from BFIs for a period of 90 days through the collection of deposits from BFIs where interest rates are fixed through the auction.

At present, there is a total of Rs 122 billion all time high liquidity surplus in the banking system.

On July 14 (yesterday) Nepal Rastra Bank has collected Rs 20 billion from Bank and Financial Instruments (BFIs) through its 'deposit collection' instrument. An interest rate of 0.27 percent has been fixed for it.

Nepal Rastra Bank (NRB) has earlier collected Rs 10 billion from bank and financial institutions (BFIs) through the same instrument.  The bidding was done on July 12 (Sunday) and an interest rate of 0.06 percent has been fixed for the deposit collection.

Weighted interest rate of the deposit collection is increasing. While the first weighted interest rate of deposit collection was 0.06 percent on July 12, it rose to 0.2 percent on July 14.

On July 16 (tomorrow) Nepal Rastra Bank is issuing deposit collection instrument worth Rs 20 billion.

Nepal Rastra Bank also issued Treasury bill worth Rs 5 billion on July 14 and weighted interest rate of 0.0004 percent has been set for the same.