July 23: The Nepal Rastra Bank has unveiled its Monetary Policy for the fiscal year 2023-24, setting seven key targets. The primary objective of the policy is to maintain foreign exchange reserves at a level that can cover at least seven months' worth of anticipated imports of goods and services.

The policy rates have been determined based on the capacity of the foreign exchange reserves to cover imports and the target annual inflation rate. Additionally, the exchange rate of the Nepalese currency against the Indian currency will remain unchanged.

To achieve the desired outcomes, the Central Bank aims to keep interbank interest rates within a specified corridor through open market operations, aligning with the operating target.

The policy also focuses on limiting inflation to 6.5 percent by preventing excessive pressure on prices caused by monetary expansion.

Furthermore, the Monetary Policy emphasizes the allocation of fiscal resources to the productive sector in line with the government's target of achieving six percent economic growth for the current fiscal year.

As part of the plan, the broad money supply is expected to increase by 12.5 percent, while credit to the private sector from banks and financial institutions is projected to rise by 11.5 percent in the same period.