Money & Finance

The Confederation of Nepalese Industries (CNI) has said that the Nepal Rastra Bank's (NRB) half-yearly monetary policy review could not boost the private sector's spirits.

The private sector organisation said on Friday that the NRB's mid-term monetary policy review had not changed as expected.

"The growth in non-performing loans, high interest rates, lack of market vitality, or at a time when industrialists' confidence was weak, everyone expected the NRB's monetary policy to make the market vibrant by reducing interest rates," CNI said. "The mid-term review failed to boost private sector morale."

On the other hand, the confederation claimed that the NRB was trying to support medium- and small-sized enterprises.

According to the CNI, the plan to restructure and reschedule loans of up to Rs20 million in the active category by mid-January 2023 by analysing the cash flow and income of these sectors and firms until mid-July 2023 is favourable.

It has also proposed restructuring and rescheduling the loans of all borrowers.

"Industries and enterprises are unable to pay their principal and interest of loan due to financial imbalances generated by lengthy abnormal conditions, and high interest rates in the market," said CNI. "As a result, the NRB should provide all industries enough time to restructure and reschedule before the end of the current fiscal year."

The confederation has also urged the NRB to address this issue in its future monetary policy review.

The CNI expressed the belief that a 1.5 percentage point cut in the overnight liquidity facility under the daily liquidity facility would help ease the interest rate.

Similarly, the CNI said it is required to assess credit classification and make the necessary measures to increase capital formation investment.