Kathmandu. With the central bank of India indicating that the interest rate will be kept low for a long time, its direct and indirect impact is being seen in Nepal as well. Analysts believe that the open border between Nepal and India, trade transactions, hundi and illegal imports and exports will also be affected after Governor Sanjay Malhotra indicated that the policy interest rate may be reduced further. <\/p>\n
Currently, the average base rate of banks and financial institutions in Nepal is around 5.36 percent. The average deposit interest rate is on the way down to 3.66 percent. <\/p>\n
According to Nepal Rastra Bank, Nepal’s economic growth rate is estimated to be around 3.8-4 percent in the current fiscal year. There is no need to tighten the monetary policy as the inflation rate is in the range of 5-6 percent. <\/p>\n
In India, inflation has fallen to around 2 percent and economic growth is expected to be 3.4 percent. Economists say that due to this gap, there is a risk of cheap loans from India, cash transactions, hundi and illegal trade of customs evading customs in Nepal. <\/p>\n
Due to the open Nepal-India border, there is a risk of the tendency of people taking loans in India at low interest rates and carrying out cash transactions in Nepal, and the tendency to smuggle gold, electronics, clothes and daily essentials into Nepal. Nepal’s trade deficit is currently around Rs 14 trillion. This is likely to increase further and put pressure on government customs revenues. <\/p>\n
According to experts, if interest rates remain low in India for a long time, Nepal will also accumulate more liquidity than investment expansion, but demand in the productive sector may remain weak for some time. Nepal needs to tighten border management, digital payment control and illegal transactions as there are indications that interest rates will remain low for at least the next 1 to 2 years.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kathmandu. With the central bank of India indicating that the interest rate will be kept low for a long time, its direct and indirect impact is being seen in Nepal as well. Analysts believe that the open border between Nepal and India, trade transactions, hundi and illegal imports and exports will also be affected after […]<\/p>\n","protected":false},"author":5,"featured_media":286477,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45031,45060,45159],"tags":[],"class_list":["post-286479","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banner-news-en","category-corporate-en","category-news-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/286479","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=286479"}],"version-history":[{"count":1,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/286479\/revisions"}],"predecessor-version":[{"id":286480,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/286479\/revisions\/286480"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/286477"}],"wp:attachment":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=286479"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=286479"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=286479"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}