Midterm Assessment of FY26 Monetary Policy Released by Nepal by CareEdge Ratings
Key Highlights:
* Nepal’s inflation in FY26 has remained exceptionally low compared to prior years: CPI inflation: 1.11%, 1.63%, rising to 3.25% by 7 months.
* Wholesale price inflation rebounded over 6%, driven by intermediate and capital goods costs. Inflation has been declining and remains within manageable levels.
* Reserves have increased by 21.3% y-o-y, ensuring ample buffer against potential external shocks.
* Gross Forex Reserves: Rs. 3,302.66 Bn (USD 22.76 Bn) as on mid-February 2026 — enough for ~18 months of imports.
* The banking sector has excess liquidity, but the demand for credit from the private sector remains subdued.
* The government's fiscal stimulus and NRB's policy easing have not yet fully translated into widespread credit demand.
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