Acting Governor Pandit Emphasizes Monetary Policy’s Role in Supporting Economic Growth
Acting Governor of Nepal Rastra Bank, Kiran Pandit, stated that the upcoming monetary policy should support the government’s target for high economic growth. He highlighted the crucial responsibility of balancing inflation control and financial stability when formulating monetary policy. Pandit also stressed the importance of prioritizing digital challenges and technology-related risk management within the financial sector as key agendas of monetary policy. Kathmandu, 16 Ashadh.
Speaking at a program on ‘The Role of Monetary Policy in Accelerating Economic Growth,’ Pandit noted that fiscal and monetary policies are naturally interconnected, though at times they may appear to conflict. He emphasized that coordination between these policies is essential. While monetary policy must aid in achieving the government’s ambitious growth targets, it also holds the equally important responsibility of keeping inflation, financial stability, and other economic indicators within acceptable limits.
Pandit clarified that the central bank formulates policy by considering its objectives, the fundamentals of monetary policy operation, and the mechanisms involved. He observed that there are high expectations about monetary policy in the market and underscored the need to manage these expectations cautiously. Additionally, he pointed out the importance of clearly understanding the distinctions between regulatory reforms and monetary policy.
Moreover, Pandit drew attention to rapidly evolving digital challenges in the financial sector. He identified subjects such as fintech, open banking, digital transaction monitoring, and technology-related risk management as significant agendas in both monetary policy and regulatory frameworks. Reflecting these changes, he stressed the need for thematic reviews and continuous dialogue. He also highlighted the importance of bridging the communication gap between policymakers and the general public. Specifically, he noted that the genuine needs and challenges of youth, farmers, and lower-income groups have yet to effectively reach the policy-making process, suggesting that media can play a vital role in reducing this divide.
