Nepal’s real deposit interest rate turns negative as inflation outpaces bank returns

english.clickmandu.com · 2 weeks ago

Nepal's real interest rate on bank deposits has turned negative, with inflation at 4.47 percent outpacing the weighted average deposit rate of 3.40 percent, causing the real value of savings to shrink by 1.07 percent. This situation, persisting for two months, means savers are losing purchasing power, and economists warn of potential capital flight and weakened domestic savings if prolonged. Despite excess liquidity, depositors are facing losses due to poor liquidity management and ineffective monetary policy transmission.