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Monetary Intervention: Central Bank Initiates Rs 30 Billion Liquidity Mopping Operation

Nepal Rastra Bank is deploying a 91-day deposit collection instrument today to absorb Rs 30 billion in excess liquidity from the financial sector.

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Monetary Intervention: Central Bank Initiates Rs 30 Billion Liquidity Mopping Operation

n an effort to manage the prevailing excess liquidity within the banking sector, Nepal Rastra Bank (NRB),has announced plans to absorb an additional Rs 30 billion from the financial system today. The liquidity mop-up will be executed through a formal bidding process scheduled for 3:00 PM. Eligible commercial banks, development banks, and finance companies (Classes 'A', 'B', and 'C') can participate, with bidding open under both single and multiple interest rate systems. Participating institutions are required to bid a minimum amount of Rs 100 million, with maximum limits scaling in multiples of Rs 50 million up to the total invoked amount. This central bank intervention utilizes a 91-day deposit collection instrument designed to temporarily sterilize surplus funds held by financial institutions. According to the central bank's circular, the maturity period for this instrument is set for Bhadra 3, 2026, on which date both the principal amount and the accrued interest will be formally reimbursed to the participating banking entities.

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