NRB’s role has always been conservative. these boomers doesn’t want to take slightest risk and they want is easy retirement bucks. I cannot even pin point what NRB has done till date to upgrade overall banking system/economy. The best outcome from their policy and this will remain as it is. I think it is only in Nepal where central bank is dictating how much dividend one should give. I don’t understand why NRB has to be so much protective on “reserve” “provisioning” when market has opened after lockdown. They could have done it a year before!
Lockdown was successful in brining interest rate down and it believe this is where we could have improved interest rate but it is back to high interest.
I’m more baffled by Nepalese banks. They are giving 9-10% pa in FD. It may increase deposit by some percentage, but how come they expect to see growth when overall economy is not growing and when there is still negative balance of payment/trade deficit. It seems their logic is, “people have money under their bed and it will come to bank when we increase interest”.
This increase in rate has surely caused panic in stock market. i know it is not bank’s job to make market green but 9-10%pa interest will increase loan interest as well. and we will be back to double digit interest. this will likely increase market price (mahangi) since most companies use debt money.
I don’t see market going up unless general saving interest is at around 7-7.5.