NRB Governor Poudel calls for policy to attract foreign investment

KATHMANDU: Nepal Rastra Bank (NRB) Governor Prof Dr Biswo Nath Poudel has stated that the country’s infrastructure development is weak and has called for a stronger institutional capacity and a policy environment that can attract foreign investment.

The remarks were made at an interaction programme titled 'Economic and Financial Status and the Direction of Monetary Policy', which concluded in Kathmandu on Tuesday. Economists and representatives of stakeholder organisations from the economic and financial sectors attended the programme.

Dr Ram Sharan Kharel, executive director of the NRB’s Economic Research Department, presented a working paper outlining the macroeconomic background, the current status of the economy and financial sector, existing challenges, and policy measures by the government and the central bank, together with a roadmap for long‑term reform.

Former vice‑chairman of National Planning Commission (NPC) and economist, Prithvi Raj Ligal, commented that while gross national savings are rising, the investment ratio remains weak. He said the external sector appears strong, but other economic indicators are fragile, and that the economy will not improve until excess liquidity is channelled into productive sectors.

Likewise, Economist Dr Govinda Nepal urged the government to mobilise foreign exchange reserves for production and infrastructure development. 

Economist Dr Kalpana Khanal warned that falling interest rates could encourage capital flight and stressed the need to direct available financial resources into infrastructure projects. Former NPC member and associate professor Dr Ramesh Chandra Paudel described the economy as sluggish and said fiscal policy must be strengthened to attract foreign investment and boost production and productivity.

The programme drew high‑ranking officials from the Ministry of Finance, the NPC and the National Natural Resources and Fiscal Commission (NNRFC), as well as senior NRB officials, industrialists, entrepreneurs, bankers, media representatives and other stakeholders. Participants offered a range of suggestions and opinions on the working paper and the current state of the economy.

NRB spokesperson Guru Prasad Paudel, who is also executive director of Human Resources Management Department, outlined the objectives of the programme and described efforts by the central bank to make the financial sector more robust and dynamic.