Nepal Rastra Bank released its monetary policy for fiscal year 2026/27 (2083/84 BS) this week, maintaining the policy rate at 4.50 percent, the Standing Deposit Facility rate at 2.75 percent, and the bank rate at 6 percent. The central bank said the stance is intended to balance economic recovery with price stability.
The policy targets credit expansion of Rs 652 billion to stimulate private sector investment and support the government's goal of 7 percent economic growth. The NRB also said it would use monetary instruments to keep the interbank rate close to the policy rate and maintain foreign exchange reserves sufficient to cover at least seven months of imports.
The policy includes provisions to help distressed industries restructure operations and manage non-performing loan portfolios, and encourages banks and financial institutions to accelerate digitalization to lower service delivery costs. The NRB projected average inflation at around 5.5 percent for the fiscal year, flagging geopolitical tensions and elevated inflation in India as upside risks.