Nepal Monetary Policy 2082/83: Key Highlights, Interest Rates, Inflation Targets, and Economic Growth Strategy

Published - July 11, 2025

Nepal Rastra Bank (NRB) has officially revealed its Monetary Policy for fiscal year 2082/083 amid significant public anticipation and economic scrutiny. This important document charts a strategic course intended to fortify Nepal's economic stability, enhance resilience against global economic disruptions, and promote inclusive and sustainable growth.

Strategic Policy Directions

The NRB's monetary policy maintains a flexible stance, prioritizing capital formation in the private sector and improvement in credit quality. Governor Poudel highlighted the enhancement of open market operations as a significant step to stabilize market liquidity.

Key Economic Targets

• GDP Growth: 6.0%

• Inflation Target: Around 5.0%

• Foreign Exchange Reserves: Seven months of import coverage

• Money Supply Growth: 13.0%

• Private Sector Credit Expansion: 12.0%

Banking and Liquidity Management

Liquidity management stands at the forefront of this year's policy. NRB has reduced key monetary rates:

• Policy Rate: Reduced from 5.0% to 4.5%

• Bank Rate: Reduced from 6.5% to 6.0%

• Deposit Collection Rate: Reduced from 3.0% to 2.75%

The Capital Adequacy Framework has been strengthened with Countercyclical Capital Buffers, encouraging banks to direct lending towards productive sectors such as agriculture, SMEs, and green initiatives. Additionally, NRB will maintain existing Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) and plans to issue NRB bonds as necessary to manage liquidity effectively.

Strategic Imperatives and Key Macroeconomic Targets

The NRB's policy outlines ambitious yet pragmatic macroeconomic targets for FY 2082/083:

• GDP Growth: A rstrong 6.0% economic growth rate is projected.

• Inflation Control: Inflation is targeted to be contained around 5.0%.

• Foreign Exchange Reserves: Reserves are aimed to cover at least seven months of merchandise imports, an indicator of external sector stability.

• Monetary Expansion: A moderate 13.0% money supply growth is anticipated.

• Private Sector Credit: A balanced 12.0% expansion in private sector credit is targeted to stimulate economic activity.

Inflation and Price Stability

Inflation remains a critical challenge, and NRB commits to rigorous oversight, targeting a stable inflation rate of approximately 5.0%. Vigilant market monitoring and timely financial interventions will be necessary to managing price volatility, especially for essential commodities.

Share Market Outlook

Investor confidence in the share market remains a key priority. NRB plans significant reforms:

• Digital Finance Innovation Hubs

• Improved regulatory transparency

• Enhanced disclosure standards

• Comprehensive financial literacy programs

These measures aim to curb market volatility and deepen investor participation sustainably.

Loan Management Reforms

NRB has enacted significant reforms in loan management, including tighter loan-to-value (LTV) ratios and stricter margin lending criteria to reduce speculative investments. The policy directs banks to rebalance loan portfolios towards productive sectors, enhancing overall loan quality and recovery rates.

Economic Forecasting and Data Utilization

The NRB underscores the importance of sound economic forecasting, leveraging advanced data analytics and statistical modeling. Improved collaboration with national statistical agencies will enhance the accuracy of economic predictions, directly informing responsive policy adjustments and boosting stakeholder confidence.

Economic Growth and Development

The Monetary Policy targets strong economic growth driven by increased agricultural productivity, industrial expansion, and a vibrant service sector. Specific interventions, including targeted credit lines and agricultural insurance schemes, have been outlined to support vulnerable sectors and shield them from market uncertainties.

Global Economic Context and Response

NRB acknowledges the impact of global economic shifts, especially from key trading partners like India, China, and the United States. Strategic measures have been outlined to maintain exchange rate stability, foreign exchange reserves, and manage external shocks through prudent foreign exchange management policies.

Forecast for Share Market and Banking Professionals

The Monetary Policy's comprehensive approach anticipates enhanced stability and growth opportunities in Nepal's banking sector. Banking professionals can expect a strengthened regulatory environment, clearer guidelines for loan management, and opportunities in sustainable financing sectors. Investors in the share market can anticipate increased market stability due to enhanced transparency, digitization of financial services, and investor protection mechanisms.

Conclusion and Way Forward

Nepal's monetary policy for the fiscal year 2082/083 outlines a clear and ambitious roadmap towards economic revitalisation and inclusive growth. Although external uncertainties persist, NRB's proactive measures promise enhanced economic resilience, investor confidence, and long-lasting national growth.

Summary: Major Highlights from the 59th Monetary Policy Presented by NRB Governor Poudel for FY 2082/83

Nepal Rastra Bank Governor Prof. Dr. Biswo Nath Poudel unveiled the 59th Monetary Policy for Fiscal Year 2082/83 on Friday, outlining reforms aimed at reviving the sluggish economy. The policy was presented via live television and social media, marking Governor Poudel’s first major policy address since assuming office.

The new policy adopts a flexible and accommodative stance, with significant rate cuts and regulatory relaxations for both borrowers and financial institutions.

Among the major highlights, the policy rate was reduced from 5% to 4.5%, while the bank rate and deposit collection rate were also lowered, signaling an intent to make borrowing more affordable and credit more accessible.

Private sector credit is projected to grow by 12%, with the central bank setting a 6% GDP growth target and aiming to cap inflation at 5.5%. The foreign exchange spending limit for Nepali travelers has been raised to USD 3,000 from USD 2,500.

The maximum individual margin loan limit has increased from Rs. 15 crore to Rs. 25 crore, while banks can now lend up to 70% of share prices, based on either the average market value or a 180-day average—whichever is lower.

Housing loan provisions were also relaxed, as first-time home buyers can now borrow up to Rs. 3 crore with a loan-to-value ratio of up to 80%.

Other major changes include a review of microfinance dividend policies, lifting of lending limits for national-level finance companies, and revised caps on non-deliverable forward contracts.

The monetary easing, regulatory reforms, and increased credit flexibility, as noted by Governor Poudel, aim to support economic recovery without compromising financial stability.

Monetary Policy FY 2082/83 – Summary Table