My thought on monetary Policy…

The Rastra Bank has announced counrtry’s monetary policy to slash the cash reserve ratio (CRR) by 050 basis points to increase the frequency of repo issue. They loudly soughed that It release the 4 billions in to the market, If projection of the NRB is fine it increase the frequency of the repo issue from the existing twice a week arrangement reassures bankers of the central banks commitment to proactively sort out the liquidity crises in the medium term.NRB as a regulator only short term crisis management is not good, also its activities not only flow the what they spoken and written of the Act. It need to be show the why of the financial institution. If it regulate only for short term it raised the confidence among the BFIs but not all people. These will relief to borrowers, particularly entrepreneurs who rely heavily on bank financing to start up and sustain their enterprises.

But apart from liquidity management efforts, the monetary policy has done little to bolster people’ confidence towards BFIs, If the Shrinking public confidence in the banking system is not reversed, the new monetary policy can do little to stabilize the financial sector. It will also mean that consumers and industrial borrowers will not find respite from the present high lending rates any time soon.

The new monetary policy has set a target of containing inflation at seven percent and maintaining the balance of payments surplus at Rs. 5 billion. Principally it may good and quite sound to listen but practically I think it is very difficult to got this result. With a 14 percent rise in capital spending and up to 43% rise in salary, demand is certain to exert enormous pressure on prices. On top of that, global food price have shown no sign of receding, and the market is severely constrained by low domestic production, supply bottlenecks and unfair business practices. These factors are certain to intensify inflationary pressures, and NRBs move to certain them by shrinking broad money supply by 50 basis points could prove ineffective just as in the past.

Group of Banking and financial sector demanded more flexible merger policy to manage this crises. So to circulate money supply in short time decrease the CRR is good but this is not enough for reform the financial sector.

A Day with libertarian

Samriddhi the Prosperity foundation organized Neetishala the public policy discourse at Dhulikhel today july 24 really informative and brainstorming for me. The session started sharp 8.30 by debriefing & catching the keyword, then discussion started with Dr. Mr. Mahesh Baskota, Dean, School of Arts, KU with Public policy in Nepal reality check. He Stated session by example of available noodles easily at urban area but not water due to the motive of public & private sector. He says that there are 2 types of stakeholders, seen and unseen, morel less unseen stakeholders are benefited than seen stakeholders. Discussion also touches the public policy making process, Scarcity of electricity and Nepal youth unemployment.

Then Second round discussion started with mr. Surath Giri on topic of Public policy lens .this session vibrant and useful for the policy makers. Generally he focused on principle of the public policy like free people are not equal and equal people are not free, sound policy consider long run, Liberty makes all the different in the world and so on principle. Most of the participants are consensus on that.

Similarly third round discussion started with advocate of limited government and libertarian Dr. Bhola chalise on Economic Policy Regime in Nepal. He focused on what is economic policy and process of formulation policy making. I think he is rigid on issues raised the voice for the freedom society.

Overall the session is good for those who want to be a libertarian and entrepreneur on site of private sector. Individually I got the thought of public policy process of libertarian; it is useful for me as a potential bureaucrat at broad sense