Kathmandu. Nepal Rastra Bank has conducted the first quarterly review of monetary policy. In the monetary policy review made public on Friday, most of the existing provisions have been retained. Many expected policy changes in the quarterly review as the central bank announced its monetary policy before the revised budget came through the replacement bill.

However, the CD ratio has some flexible provisions for 8 months. According to the NRB, banks with CD ratio above 90 percent have been asked to formulate an action plan to bring it within the stipulated limits by mid-July 2079 BS. This will provide some relief to the banks.

Similarly, in view of the existing situation of foreign exchange reserves, it has been made mandatory to keep cash margin while opening import letter of credit for specified items. The existing limits of Document Against Payment and Document Against Acceptance will also be reviewed. The existing mandatory cash ratio, bank rate and statutory liquidity ratio have been kept unchanged in line with the above monetary policy guidelines.

Arrangement will be made to provide exchange facility for importing silver only up to the maximum exchange facility of the amount provided while importing through Draft Titi. Arrangements will be made for commercial banks to issue bank guarantee if Nepali firms and companies related to commercial agriculture, manufacturing industry, infrastructure construction and tourism want to take institutional loan from abroad. The existing arrangements including interest rates and fees for foreign currency loans will be reviewed.

Similarly, arrangements will be made to collect deposits in foreign currency from non-resident Nepalis and foreign institutions involving non-resident Nepalis. The existing limit on non-deliverable forward trading of foreign currency will be reviewed.