KATHMANDU

After excessive liquidity, the Nepal Rastra Bank has decided to pull out 35 billion rupees from the banking system. This withdrawal through the banking system will start on Friday, June 11th.

The Nepal Rastra Bank has set a 7-day period for the withdrawal under the banking system.

Even though deposits are increasing in banks and financial institutions, when lending slows down, there is excess liquidity in banks. In order to manage this liquidity imbalance in the banking system, the Nepal Rastra Bank has been pulling out money through the banking system by using various tools, such as reverse repo, which means collecting deposits at different times.

According to the data of the Nepal Rastra Bank, currently there is a deposit of Rs. 61 billion (94 billion) with banks and financial institutions, while loans stand at Rs. 51 billion (13 billion). Currently, banks have a usable investment amount of Rs. 5 billion, and the interbank interest rate is at 2.92 percent. Similarly, the Treasury bill interest rate is also at a maximum of 3.20 percent.