Broad money rises 6.6 pc in 10 months of FY 2024/25: NRB

KATHMANDU: Broad money (M2) rose by 6.6% in the first 10 months of current fiscal year 2024/25, down from 8% increase a year earlier, according to the latest macroeconomic and financial situation report released by Nepal Rastra Bank (NRB) on Tuesday. On a year-on-year basis, M2 expanded by 11.4% in mid-May 2025.

Money Supply  

Net foreign assets, after adjusting for foreign-exchange valuation gains and losses, increased by Rs 438.52 billion (22.0%), against Rs 392.64 billion (26.9%) a year earlier. Reserve money grew by 4.5% in the review period, up from 2.5% a year earlier, and was 9.8% higher y-o-y in mid-May 2025.

Domestic Credit  

Domestic credit increased by 2.1% in the first 10 months of fiscal year 2024/25, compared with 2.8% rise in the same period of previous year; on a y-o-y basis it was 5.4% higher in mid-May 2025. Net claims of the monetary sector on government fell by 24.1%, versus a 12.0% decline a year earlier, and were 10.5% lower y-o-y. Claims on the private sector rose by 7.6%, up from 5.7% a year earlier, and stood 8.0% higher on a y-o-y basis.

Deposit Mobilisation

Deposits at banks and financial institutions increased by Rs 399.81 billion (6.2%), compared with Rs 443.08 billion (7.8%) a year earlier, and were 11.4% higher y-o-y. Demand, savings and fixed deposits accounted for 5.5%, 35.9% and 50.8% of the total, against 5.0%, 29.1% and 59.0% a year ago. Institutional deposits represented 35.4% of total deposits, down marginally from 35.7%.

Credit Disbursement  

Private-sector credit extended by BFIs rose by Rs 368.68 billion (7.3%), compared with Rs 225.24 billion (4.7%) in the same period of 2023/24, and was 8.4% higher y-o-y. Lending to non-financial corporations accounted for 63.1% of total, and to households 36.9%, against 63.7% and 36.3% a year earlier. By institution, commercial banks’ credit grew by 7.6%, development banks by 4.1% and finance companies by 6.5%.

Liquidity Management

The NRB absorbed a net Rs 19,238.55 billion of liquidity in the review period, including Rs 2,468.65 billion via deposit-collection auctions and Rs 16,769.90 billion via the Standing Deposit Facility; banks used Rs 2.7 billion of the Overnight Liquidity Facility. In the same period a year earlier, Rs 1,327.34 billion was absorbed. The central bank injected Rs 564.11 billion through net purchase of $4.21 billion in the foreign-exchange market, compared with Rs 630.69 billion via $4.74 billion a year earlier. It purchased Indian rupee equivalent to Rs 424.86 billion through sale of $3.12 billion, versus Rs 428.41 billion through $3.22 billion.

Inter-bank Transactions  

Turnover among BFIs totalled Rs 1,620.54 billion, including Rs 1,470.86 billion among commercial banks and Rs 149.68 billion among other financial institutions, down from Rs 3,821.09 billion (Rs 3,477.04 billion and Rs 344.05 billion) in the corresponding period of 2023/24.

Interest Rates  

The weighted-average 91-day treasury-bill rate remained at 2.95% in the 10th month of 2024/25, down from 3.02% a year earlier. The weighted-average interbank rate rose to 3.00% from 2.88%.  

Average base rates stood at 6.17% for commercial banks, 8.24% for development banks and 9.11% for finance companies, against 8.34%, 10.15% and 11.61% a year ago. Weighted-average deposit rates were 4.37%, 5.11% and 6.15%, down from 6.35%, 7.31% and 8.55%, while weighted-average lending rates stood at 8.11%, 9.45% and 10.31%, compared with 10.34%, 11.89% and 13.11% a year earlier.