KATHMANDU: Nepal Rastra Bank (NRB) had completed preparations to announce the monetary policy for the current fiscal year (FY) 2024/25 on July 19. Although it was set to be passed by a meeting of NRB’s Board of Directors on Friday morning and made public in the afternoon, the timing of the monetary policy has suddenly become uncertain.

The Nepal Rastra Bank Act authorizes the central bank to formulate and implement monetary policy. However, since Prime Minister KP Sharma Oli and ministers started discussing monetary policy, its release has become uncertain. The government is facing criticism for expressing unnecessary interest and trying to influence the monetary policy brought by the autonomous body.

Prime Minister KP Sharma Oli appointed Dr. Yuvraj Khatiwada, a former governor of Nepal Rastra Bank, as his economic adviser on Thursday, which further delayed the announcement of the monetary policy. "We had completed all preparations to publicize the monetary policy," said a senior official of Nepal Rastra Bank.

Prime Minister Oli hinted at the government's interest in monetary policy during a meeting with businessmen. On Friday, in a meeting with officials of the Confederation of Nepalese Industries, he mentioned that the monetary policy should not be rigid to keep the economy afloat. According to a government source, Prime Minister's economic advisor Khatiwada has also shown interest in the provisions of the monetary policy. Finance Minister Bishnu Paudel, in a formal meeting with economic journalists on Friday, defended himself by stating that the government did not interfere in the monetary policy as it is a matter for the central bank.

Previously, during the tenure of Governor Maha Prasad Adhikari, due to government intervention, the central bank had announced the monetary policy for FY 2021/22 only in mid-August. After the then Finance Minister Bishnu Paudel announced the budget, the central bank prepared the monetary policy. However, Janardan Sharma of CPN (Maoist Center), who became the finance minister after a change of government, pressured to stop the monetary policy as he was preparing to announce a supplementary budget through an ordinance.

Adhikari was also suspended after the government launched an investigation against him about three years ago for not cooperating with the government. Later, he was reinstated by the order of the Supreme Court.

Former Governor Dipendra Bahadur Chhetri states that even though the monetary policy supports the government's budget and programs, the Nepal Rastra Bank should be strict in some cases. "The central bank should maintain price stability and discipline in the financial sector," he said, "That's why autonomy has been given to the central bank. The government can't interfere." He noted that people in power have started interfering in monetary policy as well.

In order to make the monetary policy well-organised, the central bank issued the Monetary Policy Formulation Procedure, 2073. This procedure states that the annual monetary policy will be released within 15 days of the beginning of each fiscal year, and the quarterly and half-yearly reviews will be published within 45 days after the end of each quarter.