KATHMANDU: Nepal Rastra Bank (NRB) has resumed liquidity management operations in the new fiscal year by injecting liquidity through deposit auctions.

On Sunday, the central bank announced a deposit auction to absorb Rs 50 billion for 28 days.

This follows previous auctions held last week, where Rs 50 billion and Rs 80 billion were absorbed on Sunday and Wednesday respectively.

The central bank has been continuously managing excess liquidity in the banking system for the past two fiscal years and has started the current fiscal year with similar measures.

The auction determines the interest rate on deposits through competitive bidding.

Due to a low demand for loans relative to deposits, banks are facing excess liquidity pressure.

As a result, banks have parked over Rs 750 billion in stable deposits and deposit auctions at the central bank.

According to data on July 24, the amount held by banks with the NRB due to lack of investment opportunities stood at Rs 675.35 billion.