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Kathmandu, November 9: After the excess liquidity in the financial system failed to decrease, Nepal Rastra Bank (NRB) announced on Sunday that it will once again pull Rs 30 billion from the market. The central bank has been taking such measures recently, as banks and financial institutions are holding large amounts of loanable funds (liquidity).

To manage the excess liquidity, the NRB will withdraw the amount through its Deposit Collection Instrument for a period of 84 days, according to the bank. Last week, it had withdrawn Rs 40 billion for 175 days under the same mechanism.

NRB has been regularly mopping up liquidity from the market every Sunday and Wednesday. According to the notice issued by the central bank, banks and financial institutions interested in placing bids for deposit collection can do so online until 2 PM today.

Only ‘A’, ‘B’, and ‘C’ class banks and financial institutions are eligible to participate in the bidding process. The deposit collection instruments purchased through this process can also be used as collateral with other banks and financial institutions.

As per NRB’s notice, bids can be placed in multiples of Rs 500 million, with a minimum bid of Rs 1 billion. The bidding will be based on interest rates, and participants can submit multiple bids at different interest rates, the central bank stated.

People’s News Monitoring Service.