CNI suggests IMF not to put pressure on policies and directives

By A Staff Reporter,Kathmandu, Oct. 4: The Confederation of Nepalese Industries (CNI) and the International Monetary Fund (IMF) have discussed the country's economy.

The role of the International Monetary Fund in improving the economy, the problems faced by industrialists and the steps to be taken to improve the economy were discussed in the CNI secretariat on Tuesday.

CNI President Rajesh Kumar Agrawal asked the International Monetary Fund not to put unnecessary pressure on policies and directives.

He drew the attention of the IMF to the fact that since Nepal's economy has its own characteristics, the measures of other countries or principles are not applicable to Nepal's economy and unnecessary pressure should not be applied.

He said that increasing the interest rate may not be the only appropriate step to control the price increase as the import of petroleum products and goods has led to the price rise.

“When the demand for goods in the economy is normal, the interest rate will not affect much, but when the industry is operating at 30 per cent of its capacity, it will affect a lot,” he said.

Agrawal said that the policy of increasing interest rates to reduce the overall demand to control inflation has affected the economy.

He said that due to the lack of proper supervision after the COVID-19 pandemic, some amount of credit was misused, but the problem arose when the policies that the regulatory bodies had to take gradually after the pandemic were changed quickly.

Agrawal said that the NRB’s policies and directives are only to protect banks.

He emphasised that to solve the problems in the economy, a policy should be taken to increase the overall demand and for this, the interest rate should be reduced.

Mission Chief of IMF Tidian Kinda, IMF Resident Representative to Nepal Teresa Daban Sanchez and other members of the visiting team discussed the impact on industrialists after the implementation of the working capital loan guidelines, and the Confederation's views on reforms.