IMPACT OF MONETARY POLICY INSTRUMENTS ON PROFITABILITY: A CASE OF NEPALESE COMMERCIAL BANKS
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Abstract
In contect of Nepal, although there seems to be high level of information asymmetry, undeveloped financial insfrastructure, low level of financial stability, Budha (2015) analyzed the monetary transmission mechanism especially related to bank lending channel, the interest rate channel, and the asset price channel. The evidence of monetary transmission channels suggests that the Nepal Rastra bank was successful in
achieving the designated goals over a predetermined period of time via the growth of the money market. Therefore, it investigated the problem of inflation convergence as well as the independence of the monetary system of Nepal because of the prescence of exchange rate peg with India and its policy regarding the capital movement.
Description
The monetary authority's policy of managing the supply of money in order to achieve predetermined macroeconomic goals is known as monetary policy. The central bank's use of monetary policy to control the money supply as a tool for accomplishing preset macroeconomic goals is known as monetary policy. The main objectives of this study is toinvestigate the impact of monetary policy instruments on firm profitability in the
context of Nepalese commercial banks.