Nepal Rastra Bank is a supreme monetary authority of Nepal and is also responsible for the economic development as its objectives referred to in Nepal Rastra Bank Act, 2058 section 4. In order to achieve such objectives, Nepal Rastra Bank plays several roles which are as follows;
Nepal Rastra Bank control money supply in the money market by printing money, selling and buying governmental securities. It uses various quantitative and qualitative credit instruments in order to expansion and contraction of money supply in an economy;
It formulates necessary monetary and foreign exchange policies for the price stability and balance of payment for the sustainable economy;
It controls the foreign reserve in an economy in order to maintain exchange rate without giving adverse impact on the local currency;
Its advice & help the government to formulating fiscal policy and other developments plans and policies regarding the economic development and cause or cause to implement such economic policies.
It provides credit to women and unemployment youths at reasonable interest rate to provide self-employment opportunities.
It helps to achieve the objectives of Budget presented by the government of Nepal.
It issues license to commercial banks and financial institutions to developed and expand such institutions in order to enforce monetary and other economic policies for the management of liquidity in an economy;
It conducts economic survey in order to examine the implementation of monetary policy and to forecast the economic result.
It enhances public trust towards banks and financial institutions to increase financial literacy and economic activities;
It established and promote effective system of payment to ensure the circulation of money;
It encourages several productive sectors by reducing interest for involving on economic activities;
It maintains and promote financial stability for the sound condition of economy;
It provides incentives to financial sectors that helps Nepal Rastra Bank to stable economy of the country;
It prescribed specific format and methods to keep record of financial transactions in order for maintaining financial discipline and transparency on the financial statements.
It manages public debt of the government of Nepal as high public debt can negatively affect economic growth;
It provides special assistance on the development of the capital market in Nepal; It encourages investments and saving in order to increase the economic activities.
As a central bank, Nepal Rastra Bank is responsible for the economic development of the Nepal. For this course of action, Nepal Rastra Bank directly and indirectly intervene the market for the sound and healthy economy of the Nepal.
