Kathmandu, July 6 -- Over the last three decades, Nepal's financial landscape has been severely rattled by three distinct episodes of unnatural loan expansion, popularly known as 'credit booms'.

According to a recent research paper published by Nepal Rastra Bank (NRB), the country's central bank, each of these aggressive lending cycles was followed by an economic downturn, or 'credit bust'. The paper highlights that every boom severely weakened the country's macroeconomic indicators, resulting in ballooning balance of payments deficits, soaring current account deficits, a sharp depletion of foreign exchange reserves, and a subsequent contraction in credit growth. Recovering from the aftermath of these three cycles has proved difficult fo...