Nepal Seeks Stronger Central Bank Governance Through NRB Act Overhaul
Nepal Finance Minister Dr. Swarnim Wagle has called for amendments to the Nepal Rastra Bank (NRB) Act, stating that reforms are necessary to make the central bank more proactive, effective and accountable while improving coordination between monetary and fiscal policies.
Addressing a meeting of the House of Representatives’ Finance Committee during clause-by-clause discussions on the bill to amend the Nepal Rastra Bank Act, 2058 (2002), Wagle said that fiscal and monetary policies are closely connected and require strong coordination between the Ministry of Finance and the central bank.
He compared fiscal and monetary policies to “two wheels of the same cart”, highlighting the importance of cooperation between the government and the NRB in managing the country’s economy. Wagle supported maintaining a minimum seven-member NRB Board of Directors and said the presence of the finance secretary on the board would remain important if the provision allowing direct government instructions to the central bank is removed.
The finance minister also discussed the challenges posed by Nepal’s fixed exchange rate system with the Indian rupee, stating that it limits the scope for independent monetary policy. Referring to the concept of the “Impossible Trinity”, he said Nepal has prioritised exchange rate stability while managing capital flows. Wagle proposed reducing the number of deputy governors from three to two and called for clearer eligibility criteria for NRB board members. He stressed the need for experts from diverse fields, including economics, finance, law and statistics, to strengthen central bank governance.
