Nepal Rastra Bank Intervenes to Mop Up Excess Liquidity from Banking System

KATHMANDU — In a move to stabilize financial liquidity at the onset of the new fiscal year, Nepal Rastra Bank (NRB) actively managed short-term money market balances through institutional liquidity tools.

With commercial banks experiencing comfortable liquidity cushions, the central bank’s Monetary Management Department deployed mechanisms to manage surplus capital and stabilize short-term interest rates. Licensed Class A, B, and C financial institutions participated in competitive bidding structures designed to align monetary aggregates with core inflation targets.

Financial sector experts noted that active liquidity management by the central bank during the early weeks of the fiscal year is crucial to preventing lending rate volatility and keeping credit expansion healthy across domestic markets.