- Nepal Rashtriya Bank has announced the Monetary Policy 2078/79
- The monetary policy seems to be more focused on uplifting the digital economy of nation
- There are many other anticipations and expectations raised regarding the new policy
Nepal Rashtriya recently unveiled the Monetary Policy for Fiscal Year 2078/79. The annual monetary policy for the new fiscal year was supposed to be announced by the first week of Shrawan. However, due to the government switch and changes made by the new government via ordinance, NRB had postponed the announcement. Despite of the delayed release, the general public and concerned authorities have come up with various anticipation and expectations.
Why is Monetary Policy important?
Monetary policy is one of the key factors that helps central banks to maintain financial and economic stability in the country. The ultimate goal of monetary policy is to control inflation and manage economic fluctuation by adjusting the money supply and interest rate in the market. The policy also intends to maintain stability in the payments and exchange rates. Nepal Rashtrita Bank acts as the sole authority to publish the national monetary policy.
Monetary Policy 2078/79 Highlights and Major Provisions
The Monetary Policy 2078/79 comes with several macro-economic objectives. It has put forward initiatives to compensate the impact of the pandemic in various economic sectors. It will aid economic growth by facilitating the availability of financial instruments to increase domestic production, job creation, and economic recovery. Other target areas of influence include financial assists to private sectors, encouraging BFIs merger and acquisition and stock market trading.
Digital payments and e-banking are going to have more priorities. Implementation of National Payment Switch and QR code payments will play vital roles in boosting the digital economy. NRB will carry necessary studies associated to the possibilities of digital currency in Nepal. The policy has also paid attention towards international payment gateway service; announcement of prepaid dollar card is a remarkable effort in facilitating such services.
Following are some of the provisions for digital payment:
- The FY 2079/80 would be more focused on developing the required infrastructures and awareness for promoting digital payment transactions in a massive way
- By this year, the National Payment Switch will exist for maintaining interoperability within the digital payment platforms
- The payment service providers and payment service operators would get to enjoy the facility regarding refinancing of loans
- NRB would timely update the transaction limits of various digital payment platforms like digital wallets, mobile banking and connectIPS
- It would further facilitate in the payments and revenue collection of government authorities and units through digital means
- Soon digital payment systems would require to tie up with microfinance and cooperatives to facilitate customers of the latter one
The upcoming monetary policy cad be great assist to overcome the economic and financial challenges Nepal is going through during the period of pandemic. Administrative implementation of the new policy can lead to a sustainable economic growth in many production sectors of the country. Moreover, digital economy of Nepal will meet an evolutionary phase of development. We can hope to see an elevating future of nation’s economy in the coming days.
Nepal government had announced the budget allocation for fiscal year 2078/79 few months ago. The budget allocation for this year also focusses more on startups and digital economy growth. You can find more details on our article.