Review of Current Fiscal Policy and Monetary Policy of Nepal Essay Example

The bank has been formulating and publicly announcing monetary policy on an annual basis since 2002/03 with the major objectives of maintaining price stability and external as well as financial sector stability and to create a favorable environment for high and sustainable economic growth as directed by NRB Act, 2002. Narrowing down of current account deficit for the improvement of export and remittances inflow had resulted in the marginal surplus of the Balance of Payment despite increase in imbalance of financial account.

In this economic and financial background, the monetary policy for 2011/12 has been made public where the necessary adjustments in direction, targets and instruments of monetary policy has been made on analyzing internal as well as external economic outlook. The standing challenges of the monetary policy at present are to control inflation and maintain favorable bala