Kathmandu, July 5: Stakeholders have urged the Central Bank of the country to formulate a timely and balanced monetary policy for the upcoming fiscal year.
In the meeting of the Committee of Finance under the House of Representatives today, they also highlighted the need for introducing monetary policy that would restore confidence, promotes production and strengthens financial stability thereby supporting country’s economic recovery.
Stakeholders comprising former governors of the Nepal Rastra Bank, leaders and representatives of the banks and the financial institutions, umbrella organization of businesspersons univocally called for measures that would address key economic issues left out of the national budget. Voicing his views, former Governor Deependra Bahadur Kshetry asserted that the monetary policy should stabilize the flagging economy while maintaining consistency with fiscal policy.
He also argued that the monetary policy should safeguard the Central Bank’s autonomy. Echoing with former Governor Kshetry, Dr. Chiranjibi Nepal emphasized respecting the Central Bank’s independence and international best practices. He suggested establishing an Asset Management Company to tackle rising non-performing loans. Likewise, another former Governor Maha Prasad Adhikari noted that the current macroeconomic environment does not justify tighter monetary measures, citing stable inflation and a healthy and satisfactory external sector.
He also cautioned against rolling back earlier policy reforms introduced to boost production and economic activities. Federation of Nepalese Chambers of Commerce and Industry (FNCCI) President Anjan Shrestha observed that although the recently unveiled budget seeks to address some economic concerns, the Central Bank should address unresolved business concerns through monetary policy.
He underscored the importance of government taking private sector into confidence to increase production and generate employment. Voicing for policy reforms to revitalize country’s economy, Manoj Gyawali, CEO of Nabil Bank, pointed out the need for legal reforms for simpler banking process, He also insisted that the monetary policy should recognize that a weak banking sector threatens the entire economy and pressed for a clear distinction between genuine and willful loan defaulters.
Also airing his views, Nepal Bankers’ Association President Santosh Koirala spoke of the need for the policymakers to frame the monetary policy in line with the current economic slowdown and consider revision on loan-loss provisioning requirements.
Furthermore, Confederation of Banks and Financial Institutions Nepal (CBFIN) President Prachanda Bahadur Shrestha stressed that the Central Bank should play a stronger supportive role. He argued that a greater flexibility in micro-supervision and bad loan classification would boost market confidence. Confederation of Nepalese Industries (CNI) Vice President Bhim Prasad Ghimire and economist Nar Bahadur Thapa along with other participants saw the greater need for a timely and responsive monetary policy to accelerate the economic growth.
