Monetray Policy fails to curb price hike

The Monetary Policy has done little to control the price hike.
Speaking during Nepal Rastra Bank's 54th anniversary today, central bank governor Dipendra Bahadur Kshhetri showed serious concern over the rising prices at a time when prices around the world are falling due to financial crisis. The inflation rate at present is above 13 per cent -- nearly double the target of 7.5 per cent.
"Though Nepal's economy is not completely integrated with the global market, it has already started feeling the heat of the global financial meltdown in some sectors like tourism, exchange rate of Nepali rupee vis-à-vis US dollar and foreign employment," he said adding that local problems like energy crisis, frequent bandhs, strikes and labour disputes have also posed a serious threat to the growth that was pegged at around seven per cent.
During the current fiscal year, the expected growth in the agriculture sector and industrial output also might be adversely affected, according to Nepal Rastra Bank's data.
However, some of the financial indicators are positive. "The central bank is trying to maintain overall economic stability," the governor added. "The service sector is expected to grow satisfactorily."
The regulator of the monetary and financial market also assured that it would formulate and implement effective monetary and fiscal policies to stabilise the country's financial sector.