NCC urges NRB to maintain single-digit interest

By A Staff Reporter Kathmandu, June 22: Nepal Chamber of Commerce has submitted 17-point suggestions to the Nepal Rastra Bank (NRB) for the monetary policy of the coming fiscal year 2022/23. 

The NCC has made 17-point recommendations covering various issues, including the existing problems of the economy, pressure on foreign exchange reserves and liquidity management.

President of NCC Rajendra Malla presented the 17-point suggestion on behalf of the Chamber to Governor of NRB Maha Prasad Adhikari Monday.

While presenting the suggestions, President Malla said that the weak economy should be remedied through monetary policy. He said that it would be very challenging to achieve economic growth of 8 per cent and limit inflation to 7 per cent as mentioned in the budget.

Stating that the provision of charging from 0.25 per cent to 1.5 per cent in the past has been increased from 4 to 5 per cent at present, he also drew the attention of the central bank to amend the provision and reduce it to a maximum of 2 per cent.

President Malla said that the monetary policy should address the problem witnessed in the stock market.

"Many small investors are in trouble because the stock market is not organised," he said.

On the occasion, Governor Adhikari said that the economy had not reached a critical stage.

"The economy is not in a stage of crisis," he said. "With the exception of a few industries, businesses are still running. Consumers are facing some problems due to the impact of global inflation," he said.

The monetary policy will do its utmost to keep the economy on track, he added. The NCC has demanded that single-digit interest rates be maintained for double-digit economic growth.

Banks and financial institutions have been urged to facilitate and simplify public access and to make necessary applications, vouchers and other documents uniform.

The NCC has also demanded timely provision of capital expenditure for liquidity management.

It has requested to make the economy run by using the unspent capital at the government coffers through commercial banks.

Similarly, the Chamber has requested to maintain the CCD ratio at 85 per cent as in the previous year and increase the CD ratio to 95 per cent from the existing 90 per cent.

President Malla also urged the Governor to increase the current limit of IRs. 25,000 to IRs. 250,000 for Indian tourists visiting Nepal and facilitate exchange of IRs. 500 and IRs 2,000 denomination. 

It has been suggested for promoting digital transaction.

It has suggested that the provision of 100 per cent margin in LC business would lead to a sharp decline in the trading capacity of industrialists and increase in the cost of imports of goods and services.

The NCC has also requested encouragement through monetary policy to bring the capital in the informal sector into the banking system.

It said that the existing ceiling of Rs. 40 million and Rs. 120 million for the flow of credit in share trading should be removed.