Sunday, July 26, 2009

Highlights of mon. Policy latest

 Monetary Policy for the year 2066/067 has been published on  9th Shrawan 2066 (24th July, 2009). The highlight of the current  monetary policy is as follows:


       a) Inflation settled at 12.9% during April/ May, 2009 (2066 Baishakh)  which  was 9.2 percent on 2065 Baishakh for the same duration.

        b)  Remittance surge by 55.50 percent during the first 10 months of  fiscal  year 2065/066 to Rs. 169.18 billion, which was Rs. 108.77  billion on fiscal year  2064/065 for the same duration.

      c) The remittance of U.S dollar increased by 29.70 percent on Nepalese economy amounting to $2.20 billion for first ten months of fiscal year 2065/066 which was $1.69 billion on 2064/65 for the same period.

d)     Nepal stock exchange plunged down by 6.9 percent (749.11 from 806.26) during the fiscal end of 2065/066 in comparison to pervious fiscal end (2064/065). Political discrepancies, poor mechanism of peace and security, huge number of initial public offering increased the number of share in the market was the primary cause to retreat the sole secondary market.

e)      Market capitalization mount by 19.90 percent during the fiscal year 2065/066 amounting to Rs. 551.41 billion, which is 40% to total GDP of the country. Financial institutions held 73.30 percent, Manufacturing occupy 1.8%, hotel 1.10%, hydro sector 4.0 percent and others hold 19.70 percent of total capitalization.

f)       NRB move with the same margin loan provision against the share as before. It has a provision to provide loan on the basis of 180 days average price of scrip or last closing day's price, which one is low 50 percent of that price should be provided as margin loan to the shareholders.

g)      The limit of minimum level of paid up capital has been kept unchanged, now onward, the base for increasing capital by licensed bank and financial institutions by the NRB will be their capital fund.

h)    Commercial bank collected Rs.503.45 billion for the first 11 months of the fiscal year 2065/066.

i)        The average bad debt losses of financial institutions also plunged down during first 10 months of fiscal year 2065/66. Commercial bank had 4.90 percent down from 6.30 percent of fiscal year 2064/065. However, it was only 2.40 % of 22 commercial bank putting off 3 banks which are fully or partially controlled by government.

j)        It is expected that, the economic growth rate will settled at 5.50 percent, inflation to 7 percent during the fiscal year 2066/067.

k)      There will be provision of Statutory Liquidity Ration (SLR), during the end of Poush month 2066, A grade, B grade and C grade companies have to invest 6%, 2% and 1% respectively from their national deposit liability in government debenture. It will be increased to 8%, 3% and 2% until 2067 Ashad end.

l)       Cash reserve ratio is maintained at 5.5 percent for the commercial banks.

m)   NRB has made a provision to give
permission to the commercial bank to open the branch outside the nation.