Central bank cuts policy rate, easing borrowing costs
The quarterly review lowered the policy rate. Bankers expect credit demand to pick up over the coming months.
Nepal Rastra Bank has lowered its policy rate in the quarterly review of monetary policy, citing inflation within target and a strengthened external sector.
Deposit and lending rates at banks and financial institutions are expected to adjust in turn. Data over recent quarters had shown credit expansion running slow.
Private sector response
Industry representatives welcomed the decision but cautioned on implementation. A lower rate alone does not restart investment, they argue; demand has to recover first.
Analysts note that remittance inflows have kept foreign exchange reserves comfortable, giving the central bank room to move.
The bank said it would revisit the stance at the next review based on incoming data.
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