July 10: Finance Minister Dr Prakash Sharan Mahat has underlined the need of a liberal monetary policy for the acceleration of economic activities.    
Taking part in a discussion on "Nepal's economic situation and upcoming monetary policy," the finance minister said the economy would be vibrant if the issue of policy rate was addressed while formulating the monetary policy for the upcoming fiscal year.    
A liberal policy is capable of making the economy vibrant, according to the finance minister.
He took time to insist on the collaboration between the Finance Ministry and the Nepal Rastra Bank to promote the nation's economy.    
Finance Minister Mahat said that the government wished the NRB to function independently and make efforts for the improvement of overall economy.

“There should be coherence between the finance policy and monetary policy to operate the economy effectively,” he said.
He claimed that the government's fiscal policy emphasized on improving the economy.

"At the moment, capital flow is limited due to high cost, preventing the economy to catch its vibrancy. The government prioritizes fiscal discipline," he said adding that it had controlled the unnecessary budget transfer.    
 According to him, the government has set a target of achieving six percent economic growth in the upcoming fiscal year.    
Economist Dr Dilliraj Khanal shared his view saying that the problem in the banking and financial sector would result in problems in the entire economy. "Although the economy is on the path to improvement, it is still in crisis. The liquidity has increased at present. However, the loans have not expanded," he added.    
Stating that the government brought an extension-oriented monetary policy for the post-Covid recovery, he said that was required but it could not produce the expected output later on.    
Economist Khanal said problems like investment in the unproductive sectors, limited big business houses using a large chunk of loans on concessional basis, cooperatives becoming problematic, among others are seen in the financial sector and these needed to be addressed. -- RSS