Nepal Rastra Bank to Mop Up NPR 30 Billion in Deposits to Manage Excess Liquidity

Nepal Rastra Bank (NRB) has invited bids to collect NPR 30 billion in long-term deposits for a period of 179 days under its deposit collection instrument. The central bank said the measure is aimed at managing excess liquidity in the financial system and maintaining stability in market interest rates. The bidding process will be conducted online on Monday, with only NRB-licensed Class 'A', 'B', and 'C' banks and financial institutions eligible to participate. According to the central bank, the interest rate will be determined through a competitive bidding process, with allocations made on a priority basis to institutions quoting the lowest interest rates until the targeted amount is reached. The principal and accrued interest on the deposit collection instrument will mature on Magh 8, 2083. Financial institutions can bid for a minimum of NPR 100 million, with bids accepted in multiples of NPR 50 million, up to the total announced amount. NRB stated that the instrument is being used in line with its open market operation guidelines, which allow the central bank to absorb long-term excess liquidity for up to six months whenever necessary to ensure orderly market conditions.