Submit your Article

In a clear indication that the liquidity situation in the banking system is easing notably, Nepal Rastra Bank (NRB) issued a reverse repo worth Rs 5 billion last week. A reverse repo is the central bank's monetary instrument to mop up excess liquidity from the market. While issuing the reverse repo, the central bank borrows money from commercial banks to mop up liquidity in the banks. It was the first time in 18 months that the central bank took a move to absorb excess money in circulation. Earlier, the NRB issued a reverse repo amounting to Rs 28.35 billion on July 20, 2021. According to an NRB official who spoke under the condition of anonymity, the latest reverse repo was issued to test the market response. “The banks responded by parking their funds in the central bank which suggests the liquidity situation in the banking sector is easing,” said the official. Easing of liquidity also means that loanable funds are available with the banks. Another indication of the easing liquidity in the banking system is the decreasing interest rate of inter-bank lending which has come down to 4.23 percent on January 27 from 7.34 percent on January 18. According to NRB, the interest rate was 8.15 percent on January 1. “The banks are not using the standing liquidity facility (SLF) and the overnight liquid facility (OLF) to inject liquidity for the last few weeks,” another official of NRB said. “This suggests that liquidity has eased in the banking sector. It will help to reduce interest rates in the coming days.” According to the official, banks have already started lowering the interest rate on deposits and interest rate on lending is also expected to be lowered at least after the fourth quarter of the current fiscal year. The banking system faced a prolonged and a severe liquidity crunch which resulted from massive lending and slow deposit collection in the early months of the last fiscal year 2021/22. With deposits not increasing in the proportion of the lending, the banking system faced a severe liquidity crunch forcing the banks and financial institutions to suspend new lending from the second half of the last fiscal year. Through the monetary policy for the current fiscal year, NRB announced measures to help banks and financial institutions to maintain more liquidity. NRB reduced the targeted growth rate of credit expansion to the private sector to 12.6 percent from the targeted 19 percent in the last fiscal year. As the overexpansion of credit caused a steep jump in imports leading to the depletion of foreign currency reserves besides contributing to high inflation in the last fiscal year, the central bank came up with a plan to reduce the expansion of credit and money supply in the market through the monetary policy. With the banks focusing on deposit collection mostly through fixed deposits, total deposits from the start of the current fiscal year increased by Rs 200 billion till January 28 while the total extension of loans increased by Rs 103 billion, according to NRB. “With deposits increasing by a higher percentage than lending, there has been improvement in liquidity,” the NRB official said. However, most of the deposits the banks and financial institutions received are in the form of fixed deposits. The ratio of fixed deposits to total deposits is around 60 percent, according to NRB. “That’s why many banks will face a liquidity shortage if a few big fixed depositors withdraw their deposits,” said a CEO of a commercial bank.

The price of gold has increased by Rs 500 per tola in the domestic market on Wednesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 106, 300 per tola today. The gold was traded at Rs 105, 800 per tola on Tuesday. Meanwhile, the price of silver has increased by Rs 5 and is being traded at Rs 1,370 per tola today.

The Nepal Stock Exchange (NEPSE) plunged by 15. 70 points to close at 2,111.68 points on Tuesday. Similarly, the sensitive index dropped by 2. 36 points to close at 400. 62 points. A total of 7,553,235 unit shares of 259 companies were traded for Rs 2. 82 billion. Meanwhile, Adarsha Laghubitta Bittiya Sanstha Limited was the top gainer today with its price surging by 10. 00 percent. Likewise, Prime Life Insurance Company Limited was the top loser with its price dropped by 5. 21 percent. At the end of the day, the total market capitalization stood at Rs 3. 04 trillion.

Chinese smartphone brand Vivo on Sunday launched the newest handset of its Y series, the Vivo Y02. According to Vivo, the phone comes with a 5000 mAh battery to effortlessly complete all the tasks for a day and 2GB RAM + 32GB storage, along with a beautiful and eye-catching design. Y02 is available at Rs 12,499 across all retail stores in Nepal. The Vivo Y02 is equipped with a 6.51-inch HD+ display with eye protection that allows for an immersive and enjoyable viewing experience. With its 2.5D slim body design, the phone is beautiful as well as comfortable to hold. The smartphone is available in two colors, Cosmic Grey and Orchid Blue. The Y02 has been designed keeping in mind young consumers' busy lives who desire a smartphone that will make their day-to-day lives easier. According to the company, the Y series, aimed at young customers, has established itself in the market as one of the most popular smartphone series. "The Y Series handsets are aimed at young millennials who increasingly rely on smartphones to keep up with their hectic lifestyles," reads a press statement of the company. The entry-level smartphone is powered by a MediaTek P22 that provides high performance and reliability. The devices have a large 2GB RAM + 32GB storage that has an expandable capacity of up to 1TB. The triple card slot supports memory expansion of up to 1TB. The device has an 8MP Rear Camera along with a 5MP Front Camera, coupled with a rear f/2.0 and front 2.2 aperture that elevate the camera experience for its users when it comes to clicking a photograph or selfie. There are features such as Face Beauty and Time-Lapse on the Y02 camera to enhance your day-to-day shooting experience. As a result of these features, users can take professional-quality photos from their smartphones, which enhances their overall photography experience. Vivo has added many new features to the Y02 to improve the user experience. Vivo's Face Wake feature unlocks the phone whenever needed in a blink of an eye. Vivo's exclusive Multi Turbo 5.5 focuses on optimizing core scenes to reduce stuttering and lag in games. The device is engineered to prioritize and allocate memory and CPU resources—especially when too many apps are running simultaneously in the background.