policies has to be made in an environment of greater cross - border financial linkages. in this context i understand that this conference will focus on three particular areas : ( 1 ) reconciling domestic and cross - border considerations in the use of macroprudential and capital - flow - management tools ; ( 2 ) steps to further the development of regional bond markets and their implication for monetary policy strategies ; and ( 3 ) issues and challenges associated with increased integration of emerging market banking systems. in this regard seacen has an important role in enhancing cooperation and coordination of members for spurting regional initiatives for ameliorating perceived risks. bis central bankers ’ speeches fellow governors ladies and gentlemen, in the last several years, the dynamism of seacen is self evident. it has been successful in discharging its aim by adjusting its strategic goals in the changing environment as well as enhancing collaboration with other global financial stakeholders in general and imf, bis, bank of england, bundes bank and cemla in particular. in the meantime, while i gather the fresh memory of 49th seacen governor ’ s conference and 33rd board of governors ’ meeting held in kathmandu which was successful with fellow governors ’ encouraging participation, i would also like to express my sincere thanks to all bog members for their kind and constructive support during my tenure as the seacen chair. finally, allow me to conclude by wishing everyone here a productive and rewarding conference and a successful meeting of the board of governors. thank you. bis central bankers ’ speeches

economy in recent years and its subsequent repercussion on the nepalese economy coupled with prevailing political instability, nepal is grappling with the challenges of low economic growth, inflationary pressure and vulnerable external sector. however, on the basis of recent improvements in the domestic political and economic environment along with improvements in world financial market and prospective outlook of the global economy in the year 2014, a positive impact is expected in some major areas of the economy specially tourism, foreign employment, foreign investments and exports. the outlook for 2014 is a higher growth of around 5. 5 percent, compared with less than 4 per cent in 2013, contributed mainly by sound performance of agriculture sector. the consumer price inflation is expected to remain at around 9 percent in 2014. on the external front, exports have increased slower than imports thus further widening the trade deficit to nearly 30 percent of gdp. however, improvements in the service incomes, grants and remittance inflows exceeding 31 per cent of gdp have bis central bankers ’ speeches contributed to a surplus in the current account amounting to 4 per cent of gdp estimated for 2014. the overall balance of payments has registered a surplus for the last several years and is estimated to remain at usd 1. 05 billion in 2014. as a result of the balance of payments surplus, gross foreign exchange reserves of the banking system have reached to us $ 6. 7 billion at april 2014 ; and the reserves of the banking system are sufficient for financing merchandise imports of more than 11 months and merchandise and service imports of more than 10 months. fellow governors and distinguished delegates, in the fiscal sector, a higher rate of growth in resource mobilization relative to government expenditure has resulted in budget surplus. fiscal prudence over the last several years has helped to confine outstanding domestic debt at 12. 9 percent of the gdp. the country remains lowly indebted, as outstanding total public debt, both domestic and foreign together, accounts for little over 31 percent of gdp. due to strong balance of payments situation mostly contributed by high remittance inflows, liquidity in the banking system has remained high for some time now. monetary growth has remained at 18 per cent in april 2014 on point to point basis while most interest rates have come down to single digit. despite high monetary liquidity, growth of credit to the private sector remains within targeted band. further, the degree of financialization is still low and total credit of banks and financial institutions stands at just 63 per cent of gdp. the financial sector