Liquidity under pressure; Interbank interest rate above 4 percent

Kathmandu, April 19

Investment in the banking system (liquidity) is under pressure. The liquidity, which was above Rs. 51 arba has now come down to Rs. 41 arba. In the system, if the liquidity is less than Rs. 50 arba, it is clear that liquidity is under pressure.

Nepal Rastra Bank spokesperson, Dev Kumar Dhakal admitted that there is Rs. 41 arba liquidity in the system at present. Stating that there was some pressure on liquidity, Dhakal said that it would not affect the interest rate immediately. “Banks have already announced interest rates for Baisakh,” he said. “Interest rates have not risen.”

Spokesperson Dhakal also said that the liquidity is getting easier as the amount of refinancing and the amount of capital expenditure of the government is going to the market. At present, Rs. 143 arba has been approved for refinancing from NRB, Dhakal said, adding that Rs. 125 arba has been taken by banks and financial institutions. “The remaining Rs. 18 arba will also be taken away soon,” he said.

The interbank rate raised and has reached to 4.26 percent. About a month and a half ago, the interbank interest rate fell below 1 percent. “The current interbank interest rate has also come down,” Dhakal said. “A few days ago, the interbank interest rate was 4.7 percent.”