“Given the present balance of payment (BoP) crisis, the government needs to support and promote industries in this crucial phase. Unfortunately, increasing borrowing rate is not supporting us,” said Pandey.[break]
To find appropriate solution to the crisis, Pandey said the government has already commissioned Nepal Rastra Bank (NRB) to study out the spread rate, which delineates differences between deposit and lending rates, of the banking system.
Addressing a program in the capital on Thursday, Pandey even referred to the industrialists complaint that ´banks are presently operating with high profit margin´ with high priority and said that he would personally talk with bankers on the possibility of banks operating with minimum profit, so as to support industries and other productive sectors.
He further added that the Finance ministry has initiated study to identify whether the present drop in remittance growth rate was temporary or will sustain over the months to ascertain the extent of balance of payment (BoP) crisis.
“We have taken immediate possible corrective measures like discouraging the unnatural gold imports. However, we will take further policy decisions only after we become sure of how the remittance growth will move in days to come,” he said.
Pandey tagged the liquidity crunch in the financial system, which has eased for now, as a temporary phenomenon and expressed hope for the situation to improve by March, when the development spending will rise.
“In fact, we believe the economy will cast relatively better picture in the next couple of months when the development spending will pick up and our corrective actions of now will start to check unwanted rise of imports,” he said.
Pandey, who is also the coordinator of the committee formed to recommend candidates for the post of Governor of NRB, said the committee would not compromise on professionalism and competence while making the recommendation.
Bankers, earlier, urged the government to appoint highly competent professional, who can handle the present unfavorable economic situation well, as the new Governor.
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