Kathmandu, May 24
The supply of broad money (M2) grew by 13.5 per cent during the first nine months of the Fiscal Year 2011/12 compared to a growth of 6.7 per cent in the same period of the previous year.On year-on-year (y-o-y) basis, the broad money supply expanded by 19.4 per cent in mid-April 2012, according to a Nepal Rastra Bank (NRB) report.
The supply of narrow money (M1) increased by 7.4 per cent during the review period as compared to a fall by 0.2 per cent in the same period of the last fiscal year. On y-o-y basis, such money expanded by 13.2 per cent in mid-March 2012.
Net foreign assets increased by Rs. 91.37 billion (42.3 per cent) during the nine months of the current fiscal year against a decline of Rs. 14.94 billion (7 per cent) in the same period of the previous fiscal year, the report said.
Domestic credit increased by 3.0 per cent during the review period. It had increased by 7.6 per cent in the same period of the previous year. On y-o-y basis, domestic credit increased by 9.7 per cent in mid-April 2012.
Similarly, the reserve money increased by 11.3 per cent during the review period against decline by 4.7 per cent in the corresponding period last year
Deposit mobilization of banks and financial institutions increased by 13.5 per cent (Rs. 110.73 billion) during the period as against a growth of 7.5 per cent (Rs. 54.62 billion) in the corresponding period of the previous year.
Deposit mobilization of commercial banks, development banks and finance companies increased by 15.8 per cent, 10.8 per cent and 1.6 per cent respectively. During review period, loans and advances of banks and financial institutions increased by 10.1 per cent (Rs. 86.49 billion) compared to a growth of 11.3 per cent (Rs. 84.20 billion) in the corresponding period of the previous fiscal year.
NRB mopped up net liquidity of Rs. 7.66 billion as a result of liquidity injection of Rs. 0.74 billion through repo auction and liquidity mop up of Rs. 8.40 billion through outright sale auction under open market operations, the report said.
The central bank injected net liquidity of Rs. 181.88 billion through the purchase of USD 2.31 billion from foreign exchange market (commercial banks) during the review period.
NRB purchased Indian currency (INR) equivalent to Rs. 168.34 billion through the sale of USD 2.14 billion in the Indian money market during the review period. INR equivalent to Rs. 138.04 billion was purchased through the sale of USD 1.90 billion in the corresponding period of the previous year.
Inter-bank transaction of commercial banks stood at Rs. 145.55 billion during the nine months of current fiscal year.