Room for improvement in monetary policy
Before the unveiling of the new monetary policy, I had, through the media, advised the government to exercise caution while addressing some of the demands of the private sector. Thanks to the government for incorporating my suggestions.
The policy has pledged to boost small and medium-sized enterprises, but it has not said how Nepal Rastra Bank will do it.
The policy has also promised to review risk weightage on margin lending, housing loans, and hire purchase loans. Last year, the external sector was in a tight position. Before that, the Covid-19 pandemic had hampered the economy. Now, we have enough foreign reserves to trade for nearly 10 months, which is a better situation. Banks and financial institutions too have extra Rs 400bn for investment. But the industrial sector has not recovered and the policy has not much to offer. All in all, there is room for improvement in the policy.
The author is an economist
