Monetary policy blunder

Bringing out the policy a week later than the scheduled time doesn’t boost the confidence of foreign investors.

The instant reaction to the Monetary Policy for Fiscal Year 2024-25 has been celebratory for the most part. How it will be judged in months and quarters to come remains to be seen. For now, the stock market has spoken. The Nepal Stock Exchange (NEPSE), which had already been rallying feverishly since early July, surged by 4.4 percent on July 28—the first day of trading after the Nepal Rastra Bank (NRB), the country’s central bank, published the policy on July 26. The NRB has drawn accolades for adopting an expansionary policy. It lowered the benchmark interest rates, scrapped the Rs200 million margin-loan cap for institutional investors and reduced provisioning requirement for banks, among others.