Kathmandu – The Nepal Rastra Bank (NRB) is one of the institutions that operates under the broader framework of the Government of Nepal, but it retains autonomy in formulating its own monetary policy. Such independence is vital for the nation’s economic well-being.

There is often a misconception in Nepal that economic growth and stability are opposing objectives, whereas in fact, they are complementary. Referring to the recent disagreements between the Government of Nepal and the NRB, Finance Secretary Ghanashyam Upadhyay clarified that such differences should not be interpreted as institutional conflict:

“This is not a dispute between two institutions, but rather a difference in perspectives on certain policy issues. Both entities work toward the shared goal of improving the country’s economic health.”

He emphasized the importance of coordination between national planning, fiscal policy, and monetary policy. The National Planning Commission provides the government with strategic plans and projections for the budget. These plans are then operationalized through the budget, and to fulfill those objectives, the monetary policy is aligned accordingly.

“NRB formulates monetary policy that balances macroeconomic stability while supporting economic growth,” Upadhyay explained.

On the matter of institutional coordination, the Finance Secretary dismissed the idea that a separate committee is required to manage relations between the Ministry of Finance and the NRB. He stated:

“There is already a high level of coordination, and we do not believe the budget includes any overly ambitious programs that cannot be implemented. However, we may hold different opinions on the pace and method of implementation.”

The newly announced budget has provisions that allow for procurement processes to begin immediately from the day after the budget announcement (i.e., from Jestha 16). According to the Finance Secretary, this signals the government’s commitment to timely execution and ensures that the budget is practically implementable.

“Overall, the budget is satisfactory,” he concluded.

(Based on insights shared by Finance Secretary Ghanashyam Upadhyay during the fourth session of the third ‘Banking Discourse 2025’ titled “Monetary Policy: Strategic Partnership Between Fiscal and Monetary Policy to Break the Cycle of Economic Stagnation”)