Experts speak: How do we see the monetary policy?

On 24^th July, 2019, Dr. Chiranjibi Nepal unveiled the monetary policy for the FY 2076/77. Amidst all the rumors on forceful merger, liquidity management, full fledge implementation of BASEL III, the policy was different from all the rumors. The policy was the last from current governor and revolved around the major aspects of previous policies. ShareSansar talked to few experts and investors regarding the recent monetary policy. Let us find out what they have to say:

Govinda Prasad Dhakal; CEO of Garima Bikas Bank Limited, perceives the policy as a means to ease the liquidity crunch of the market. Mr. Dhakal believes the policy is oriented towards the prioritization of productive based sector. He further claims the governor has encouraged banks to outperform their best by providing several facilities. He believes that liquidity crunch was one of the biggest challenges for the banking sector.However, now that banking infrastructures and necessary provisions have been established in regards to the problem by the policy, he believes in the upcoming days banking economy will have an easy access to avenues of funds.

Bharat Ranabhat; President of Brokers’ Association of Nepal, is of the view that the policy has not impacted the market negatively. The policy mainly emphasizes on the banking sector. However, the policies related to debenture might impact the market yet in long term, the funds collected will return to the market. Mr. Ranabhat is rather in the favor of the policy. Besides, he also believes that upcoming days will reflect fewer problems due to liquidity crisis. The problem might not be solved in a day or two but has built infrastructures for a long term.

Chhote Lal Rauniyar; President of Nepal Investors’ Forum, perceives the monetary policy as a balanced one. Commercial banks have not been put into a forced merger and rather have been encouraged merger by will by providing several benefit packages. This adds more value to the banking economy. Besides, the banks will now be reserve surplus based banks so; the foundation of these banks will be stronger. As a result, the banks will be in apposition to help the infrastructural development of the country and build a better economy. The monetary policy goes well with Nepal’s target to take our GDP at a double digit at the soonest possible.

Srijana Subedi; General Member of Nepal Investors’ Forum and veteran investor, believes the monetary policy is liberal. The policy has not pressurized any banks to go into forced merger. Instead “merger by will” can help banks choose their partner analyzing their strength and weakness. Moreover, the “merger by will” might complement the merger as compared to the forced merger. Besides, the policy has reflected well for the banking economy. In a way, a country with a stronger banking economy is a country with an efficient stock market so, the monetary policy is liberal enough and complements well with the budget.

Most of the experts and investors view monetary policy as liberal and balanced. What is your opinion on the policy?