Nepal Rastra Bank (NRB) has announced its monetary policy for the fiscal year 2082/83 (2025/26), focusing on economic recovery and credit growth. Governor Dr. Biswo Nath Poudel unveiled the policy through a live broadcast, calling it a flexible and accommodative monetary policy designed to revive the sluggish economy while maintaining macroeconomic stability.
Key Interest Rates Reduced
One of the most notable changes in this monetary policy is the reduction of key interest rates:
- The bank rate has been reduced from 6.5% to 6%
- The policy rate has been cut from 5% to 4.5%
- The deposit collection rate has decreased from 3% to 2.75%
These changes are expected to stimulate borrowing and investment.
Home Loan and Credit Relaxations
The monetary policy also includes significant revisions to housing and personal loan guidelines:
- The home loan limit for first-time buyers has been raised from Rs. 2 crore to Rs. 3 crore
- The loan-to-value (LTV) ratio for first-time buyers is now 80%
- For other housing loans, banks can lend up to 70% of the property value, up from 50%
Higher Limits for Personal and Business Loans
The policy boosts liquidity for individuals and investors:
- The margin loan limit has been increased from Rs. 15 crore to Rs. 25 crore
- Banks can lend up to 70% of the average market price or 180-day average price of shares
- Foreign exchange allowance for Nepali travelers has risen from USD 2,500 to USD 3,000
Growth Targets and Sector Support
NRB has projected 12% private sector credit growth for the coming year. The government also aims for:
- 6% GDP growth
- 5.5% inflation ceiling
In addition, the monetary policy plans to review interest capitalization for energy sector loans and dividend distributions by microfinance institutions.
Capital and Regulatory Reforms
- Banks and financial institutions may now increase capital with NRB approval
- Restrictions on national-level finance companies deploying deposits 15x their core capital will be lifted
- The limit for non-deliverable forwards based on core capital has been increased from 20% to 25%
With lowered interest rates, increased loan flexibility, and higher forex limits, the monetary policy for FY 2082/83 sets the tone for cautious optimism and growth in Nepal’s financial landscape. Governor Poudel’s first major announcement reflects a strong push to energize the economy while maintaining regulatory oversight.
