Monetary System of Nepal

Focusing on a comprehensive analysis of the monetary system comprising the money supply and money demand aspects in the Nepalese economy, this book is a valuable source of information for students of economics and management at the postgraduate level. Besides, bankers, planners, researchers, policy makers as well as professional readers will also find it highly advantageous. The book deals with money demand and currency substitution behaviour of the Nepalese people in business transactions. It incorporates monetary planning and policy in order to achieve a higher level of output and employment, price stability and a satisfactory level of balance of payments. The major determinants of money supply and demand functions have been identified and tested empirically through the different econometric models. The empirical findings reveal significant positive association of income and price level with money demand function. The author propounds the view that the combination of monetary and fiscal policy is a more potent tool to improve the unfavourable balance of payments and to maintain price stability in the Nepalese economy.