Steering Nepal Rastra Bank to Economic Resilience and Market Stability with Newly Elected Governor Dr. Bishwo Nath Poudel

Dr. Bishwo Nath Poudel has assumed office as the 18th Governor of Nepal Rastra Bank (NRB), and with him comes a rich depository of academic qualifications and professional expertise that will reshape Nepal's financial landscape. His appointment on May 20, 2025, and the oath-taking ceremony on May 21 put an end to the long-standing vacancy at the helm of the nation's central bank and marked the beginning of a new chapter in Nepal's economic governance.

A Distinguished Background in Economics and Policy

His educational qualifications and varied work history make Dr. Poudel well-placed to tackle Nepal's economic complexities. With a Ph.D. in Agricultural and Resource Economics from the University of California, Berkeley, he is arming himself with strong analytical skills for this demanding position. His three-continent educational journey, a Bachelor's degree in Engineering in Shanghai, China, followed by a Master's in Economics a vantage point that will be useful in managing Nepal's global financial relations.

Dr. Poudel worked as Vice-Chairman of the National Planning Commission for 14 months before being appointed as NRB Governor, during which he gained tremendous experience in national economic planning and policy formulation. His career also involves consultancy roles with renowned international organizations, such as the World Bank (2012-2015) and the International Labour Organization (2018-2020), through which he has experienced global economic best practices and development strategies.

Dr. Poudel has been a member of the Board at Sanima Bank and Middle Tamor Hydropower Company, giving him hands-on expertise in the finance and energy industries. As the visiting Associate Professor of Kathmandu University, he has been involved with economic education and research in Nepal.

Actions taken and market reactions at the beginning

Already, the selection of Dr. Poudel has triggered a buzz in Nepal's financial markets. The benchmark index at the Nepal Stock Exchange (NEPSE) added 49.09 points, or 1.86%, May 20, 2025, after his appointment was made public. Investor confidence is being mirrored through the good leadership of the central bank.

Dr. Poudel was the type of person who never wasted any time in making his mark. First, he proved practical in light of new currency requirements by giving an approval order for printing new banknotes of Rs 500 and Rs 1,000 denominations. More importantly, during his inauguration speech, he touched upon the need to strengthen the security of public deposits in banks and financial institutions while introducing himself with a commitment to improve loan policies for the nation.

Important Economic Stability Factors:

Dr. Poudel has also listed some priorities he will introduce during his tenure as NRB Governor. Topping the list is the removal of Nepal from the FATF grey list, which would be a plus for Nepal's global financial standing and hindrances to foreign investment. This reflects his awareness of global financial rules and how they impinge on Nepal's economic outlook.

The other key priority is enhancing supervisory oversight of the financial sector. "While enhancing supervisory oversight of the financial sector, efforts will be made to correct emerging problems by making a thorough review of banks and financial institutions," Dr. Poudel said after his appointment. This strategy indicates an activist approach to managing Nepal's banking system vulnerabilities before they become more severe issues.

Dr. Poudel has also emphasized the very important link between monetary and fiscal policy. "Monetary policy has a key role to play in making fiscal policy successful. Regulation and supervision are equally vital, but we need to prioritize building supervisory capacity over tightening rules too much," he stated in his first speech. This balanced perspective demonstrates maturity in perceiving the complementary roles of different policy tools in the management of the economy.

A Collaborative Style of Leadership

The most heartening aspect of Dr. Poudel's leadership style is his insistence on consultation and coordination. "Policy decisions have to be made through dialogue. I don't think that we should impose decisions unilaterally. We will act only after consulting with all the stakeholders involved," he stated after taking office. Such a consensus-building style can be helpful in mobilizing support for tough economic reforms and also in effectively implementing policies.

Former NRB Governor Dipendra Bahadur Chhetri has noted that the new governor has a key role to play in formulating policies to resolve key financial sector issues. Conversely, Deepak Shrestha, Vice-President of the Nepal Chamber of Commerce, noted that "the private sector is also suffering from the economic slowdown; it cannot be neglected by the central bank," echoing the hope of business community leaders that Dr. Poudel will devise policies favorable to private business.

Strengthen Nepal Stock Market

Dr. Poudel's appointment was at a critical time for Nepal's stock market which faces numerous challenges, including volatility, insufficient regulatory monitoring, and manipulation. In his expertise in economics as well as his commitment to trying to boost confidence in the capital market, he could reform these ills through a number of changes.

Perhaps the most important way that central banks affect stock markets is through monetary policy interest rates. By manipulating interest rates carefully, Dr. Poudel can help steady market fluctuations while continuing to foster economic growth. This balancing act both takes technical skill and good judgment, which Dr. Poudel has exhibited throughout his career.

The Nepal Stock Exchange has been plagued by problems of corporate governance and market manipulation. Reports indicate that an amount of 15 trillion Nepali Rupees of investors' money has, reportedly, disappeared into thin air in the last few years due to manipulative practices. Speaking to the THT on Thursday, Dr. Poudel said explicitly, "It is the responsibility of the central bank to raise the morale of the country's capital market" and that he would "fully commit to safeguarding the public's money". These statements show that he understands the necessity to restore investors' confidence in the market.

Investor education is another area where he would be useful with his academic background. In Nepal, large portions of potential investors are ill-informed regarding how the stock exchange system functions and the risks and strategies involved, leading to poor investment decisions. Dr. Poudel can operate through the central bank in terms of fostering financial literacy and investor education that would be more meaningful and effective.

Economic Outlook Under New Leadership

It is a challenging time for Nepal's economy as Dr. Poudel assumes the role of NRB Governor. The outgoing Governor Maha Prasad Adhikari said the upcoming governor will inherit these few key tasks: ensuring financial sector stability, promoting lending to the productive sectors, and addressing shadow banking. For these multifaceted challenges, Dr. Poudel's rich experience in theoretical economics as well as its practical implementation in the policy arena positions him to drive these multifaceted issues toward resolution.

His background in the National Planning Commission provides him with an understanding of Nepal's development priorities, and his global experience working with institutions such as the World Bank offers a window to international best practices. This blend may enable him to formulate policies that are both domestically relevant and internationally competitive.

Reasons for Optimism

There are quite a few strong reasons why Dr. Poudel's appointment has been a cause for optimism among economists, businesspersons, and market players.

First of all, his strong academic background and practical exposure to economic policy ensure him of having the technical capabilities that allow him to combat serious financial challenges. His Ph.D. from UC Berkeley and his experience with international organizations ensure him of his capacity for sophisticated economic analysis.

Second, his stated commitment to consultation and stakeholder engagement suggests a leadership style that values diverse perspectives and seeks to build consensus. This approach could help overcome the political obstacles that have sometimes hindered economic reforms in Nepal.

Third, his particular emphasis on the development of the capital market shows that he recognizes the value of strengthening Nepal's financial markets as a means of economic development. By enhancing market integrity and investor confidence, he would be able to mobilize more resources into productive investments.

Fourth, public and private sector service experience provides a very clear picture of how government policies influence investors and business houses. This would enable him to design policies that help promote the private sector while ensuring financial stability.

At Last,

This appointment brings forth a great opportunity for Nepal's economy with Dr. Bishwo Nath Poudel as its incoming Governor. His academic excellence and policy experiences, in addition to his commitment to collaborative leadership, will serve as a solid foundation to address Nepal's financial challenges. The ways ahead will certainly yield some difficulty, but both stated priorities and actions taken in the short term suggest a thoughtful, balanced approach to central banking.

As the very words uttered by Dr. Poudel, "It is the responsibility of the central bank to raise the morale of the country's capital market". Under his leadership, it is worthwhile thinking that the financial system of Nepal would become much stronger, more transparent, and supportive of the growth of the economy. The positive reaction of the stock market in the aftermath of his appointment is an indication that investors believe the financial future of Nepal is bright under his stewardship.

Article By: Sandip Poudel

Financial Researcher