Banking News – Former Executive Director of Nepal Rastra Bank (NRB), Nar Bahadur Thapa, has urged the central bank to adopt a medium-term monetary policy framework, stating that a five-year policy cycle would improve transparency, consistency, and long-term policy effectiveness.

Speaking at the “Dialogue on Monetary Policy 2083/84” organized by the Former Planners Forum Nepal, Thapa said that many countries have already embraced medium-term monetary policy frameworks and that Nepal should adopt the best international practices. He noted that the time has come for the NRB to introduce this reform as a significant policy milestone.

Thapa explained that the monetary policy for the upcoming fiscal year has been divided into three sections: the macroeconomic report, the implementation status of the previous year’s monetary policy, and the policy measures for the new fiscal year.

He further stated that while the Nepal Rastra Bank Act outlines multiple objectives for monetary policy, the upcoming policy appears to focus on a single objective. He stressed that effective monetary policy management should remain a priority and clarified that although a medium-term framework is desirable, there is currently no legal obligation for the NRB to adopt it.

Thapa also emphasized the need to strengthen transparency, criticizing the removal of statistical tables from the monetary policy document and arguing that they should remain a mandatory component.

He further warned that policies and regulations formulated through consensus-based arrangements could undermine transparency, urging policymakers to ensure that policy decisions are based on sound institutional principles rather than consensus alone.