Kathmandu, July 23: The Nepal Rastra Bank today unveiled the Monetary Policy for the current fiscal year 2023-34, setting seven different targets to support economic growth and stability.

While speaking at the policy announcement, the Central Bank emphasized maintaining foreign exchange reserves at a sufficient level to cover the expected imports of goods and services for at least seven months.The policy rates have been determined based on the capacity of foreign exchange reserves to cover imports and achieve the target annual inflation rate. Additionally, the exchange rate of the Nepalese currency against the Indian currency will remain unchanged.

To ensure interbank interest rates remain within the interest corridor, the Monetary Policy aims to operate and promote open market operations based on the operating target position.In an effort to contain inflation, the policy targets to limit it at 6.5 percent, thus preventing excessive pressure on prices due to monetary expansion.Given the budget’s objective of achieving six percent economic growth for the current fiscal year, the Central Bank prioritizes channeling fiscal resources towards the productive sector.

The policy projects an increase in broad money supply by 12.5 percent and anticipates a rise of 11.5 percent in credit to the private sector from banks and financial institutions during the current fiscal year.