KATHMANDU: Nepal government is raising internal loan worth Rs. 86 billion from the market in fifteen days to cover its expenses as per the budget of current fiscal year 2018/19.
On behalf of the government, Nepal Rastra Bank (NRB) is raising the internal loan in between May 13 to 28. The NRB has issued a public notice for the auction of treasury bills and development bonds for raising the loan.
The NRB is raising Rs. 36 billion loan issuing treasury bills while remaining Rs. 50 billion from development bonds.
The NRB is issuing 91-day, 182-day and 364-day treasury bills. The central bank informed that the interest rates would be determined from the process of auctioning. The treasury bills will be auctioned on May 13, 20 and 27.
Similarly, the central bank is issuing development period with the maturity period of 6, 7, 9, 10, 11, 13, and 14 years which will be auctioned on May 28, 13, 15, 19, 21, 23 and 26 respectively.
Uttar Kumar Khatri, spokesperson of the Ministry of Finance, said that the raising of internal debt was as usual as per the previous plan of the government to meet need of resources.
Raising internal loan is customary process of the government and is a tool to maintain financial stability, he said.
He said that it was the first time that the government was raising the internal debt during the current fiscal year. The government has proposed to raise Rs. 172 billion internal loan to meet its expenditure for the current fiscal year, he added.
The government can raise more internal debt during the current fiscal year, he said.
He said that the internal loan raised from the market would not have any adverse effect in the economy.
However, bankers said that the raise in internal debt in such a high amount might create problem on liquidity in banking sector.
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