NRB Issues Another Rs. 25 Billion Bond to Absorb Excess Liquidity

The Nepal Rastra Bank (NRB) has announced the issuance of a one-year central bank bond worth Rs. 25 billion under the name "NRB Bond 2084 'Ga'", continuing its efforts to absorb excess liquidity from the banking system. The latest issue, scheduled for Asar 19, 2083, comes just days after the central bank floated bonds worth Rs. 45 billion and Rs. 35 billion, bringing the total bond issuance to Rs. 105 billion through three consecutive offerings. Only licensed Class 'A', 'B', and 'C' banks and financial institutions are eligible to participate in the bidding process. The interest rate will be determined through competitive bidding, with interest payments made every six months and the principal repaid upon maturity on Asar 19, 2084. The bonds can be pledged as collateral for loans from NRB and other financial institutions and will qualify toward the statutory liquidity ratio, though they cannot be counted toward the mandatory cash reserve requirement. The central bank has also warned that successful bidders failing to maintain sufficient funds on the settlement date will face a 2.5 percent financial penalty and a six-month suspension from future open market operations.