CNI comes up with its views on monetary policy

KATHMANDU, FEBRUARY 18 : Confederation of Nepalese Industries (CNI) has officially expressed its mixed views regarding the half-yearly review of the monetary policy of the current fiscal year made public by the central bank yesterday.

Issuing a press communique today, the CNI hails the decision of the Nepal Rastra Bank to carry out a study for ensuring less interest rates in the credits floated to productive sectors compared to the non-productive ones.  “Likewise, the provision of the review to allow infrastructure banks to issue bonds related to the energy sector is also positive.”

However, the apex body of the business fraternity, is unhappy with the tools proposed via the review to resolve the prevalent liquidity crisis in the country’s financial system.   One such tool is the increment of the bank rate of the commercial banks by two- digit.  The confederation claims that it will only invite the spike in the interest rates of investment amount and further swelling of inflation that could further hit the economy already  beset by the Covid-19 pandemic.

Similarly, the confederation has stated that the central bank is imprudently inclined to control the refinancing facilities provided to the industries hard hit by the pandemic.   “We demand for not controlling such facilities but rather expanding them to tourism and other export-oriented industries that generate foreign currencies.”

According to the CNI, it is mandatory for the government to take certain proactive steps to avert the continuous depletion in the foreign currency reserves. “Such steps could well be allowing the Non-Resident Nepalis to open bank accounts in Nepal in foreign currency and facilitating the foreigners of Nepali origin to buy apartments and capital market, among others".