The Nepal Rastra Bank (NRB) is issuing a repurchase agreement (repo) worth Rs 20 billion today. The repo will mature on December 8. The bank is issuing the repo to prevent the shortage of investment capital in banks and financial systems.
The central banks issues repo if there is shortage of liquidity in the banking system. The central bank has been issuing the repo continuously for the past few times to address the liquidity crunch in the banking system.
The NRB on November 11 had issued a repo worth Rs 20 billion. According to the central bank, ‘A’, ‘B’ and ‘C’ class banks and financial institutions would buy the repo through bidding.