Kathmandu. Former Governor of Nepal Rastra Bank, Maha Prasad Adhikari, has said that the monetary policy to be brought by the Nepal Rastra Bank for the coming fiscal year should be flexible as there is no reason for tightening it.

He said this while discussing the monetary policy at a meeting of the Finance Committee under the House of Representatives today. He said price stability and the situation in the external sector were satisfactory. He suggested that interest rates and other monetary instruments should not be tightened now.

“Monetary policy is a bit technical and a very predictable subject. What is the overall situation of the monetary policy line within the country and what is the external situation? That will decide,” he said, adding, “We can directly assess what kind of monetary policy will come.” Monetary policy is inherently flexible when the country is in a strong position in terms of price conditions and external sector stability. There is no need to be tight. ”

He argues that the central bank is not in a position to tighten the bank rate, policy rate and the rate fixed for deposit collection. “At present, there is no basis for the NRB to tighten the bank rate, policy rate or interest rate corridor,” he said, adding that the monetary policy would be formulated only after high-level technical analysis and detailed discussion within the NRB.

The official said that the policies implemented in the past to increase domestic production and improve the economy should not be removed in the name of ease.

The official said that it would be difficult to re-implement such policies in the future if the production-oriented policies are scrapped as there is sufficient liquidity in the banking system, remittances are coming in around two and a half billion rupees every month and there are plenty of investable resources.

He said that the monetary policy should be brought focusing on economic reform.