KATHMANDU: Banks and financial institutions have parked around Rs 1,009 billion at the Nepal Rastra Bank as loan demand remains weak and economic activity continues to slow.

The central bank has absorbed the excess liquidity through deposit collection instruments, bonds, and standing deposit facilities.

It is also preparing to withdraw an additional Rs 20 billion through a 44-day instrument.

Although around Rs 43 billion liquidity remains in the system, maturing deposits are being reabsorbed to manage surplus cash and stabilize interest rates.

The bank rate stands at 6 percent, while the standing deposit facility rate is 2.75 percent.