KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.

On Tuesday, the Nepal Stock Exchange (NEPSE) saw a notable rise of 47 points despite triggering two circuit breakers during trading. This surge, marking the third trading day of the week, pushed the NEPSE index up by 2.29%, surpassing the 2100 mark.

The optimism was fueled by expectations surrounding a potential coalition government between CPN-UML and Nepali Congress. Meanwhile, Nepal Rastra Bank (NRB) reported a 57% increase in suspicious financial transactions in 2023, amounting to Rs 40 billion.

This rise underscores heightened vigilance against fraud, terrorist financing, and money laundering in the country’s banking sector.

On another front, gold prices in Nepal experienced a slight uptick, with fine gold reaching Rs 142,300 per tola and standard gold valued at Rs 141,600 per tola.

This adjustment reflects ongoing market dynamics influenced by various economic factors and global trends impacting precious metal valuations.

Additionally, there has been a notable shift in Nepal’s automotive market towards electric vehicles (EVs), with imports from China showing a significant increase.

EV imports totaled 236 units valued at Rs 674 million in 2019-20, signaling a move towards sustainable transportation solutions amidst declining imports of fossil fuel-consuming vehicles.

In other developments, a committee has been formed to recommend a new chairman for the Securities Board of Nepal (SEBON) following disagreements among ruling parties.

This committee’s formation aims to fill the vacancy left by the end of former chairman Ramesh Hamal’s tenure. These updates highlight key economic trends and regulatory actions shaping Nepal’s business landscape.

NEPSE rises by 47 points despite two circuit breakers

NEPSE, on Tuesday, surged by 47 points despite triggering two circuit breakers on Tuesday, marking the third trading day of the week.

The market paused briefly twice due to rapid gains, eventually closing at 47.04 points higher.

The NEPSE index rose by 2.29%, surpassing the 2100 mark. Share prices of 227 companies increased while 17 declined, with NRN Microfinance leading in trading volume at Rs 123.3 million.

The market saw 60,720 transactions totaling Rs 4.577 billion, fueled by optimism over a potential coalition government between CPN-UML and Nepali Congress.

NRB reports 57% surge in suspicious financial transactions

Nepal Rastra Bank (NRB) has reported a substantial increase in suspicious financial transactions through the country’s banks and financial institutions (BFIs). According to the Financial Investigation Unit (FIU) of NRB, suspicious transactions surged by 57 percent in 2023, reaching 6,255 cases totaling approximately Rs 40 billion.

This marks a rise from previous years, with 1,103 cases reported in 2020 and 3,979 cases in 2022. BFIs are mandated by NRB rules to promptly report any suspicious transactions related to fraud, terrorist financing, and money laundering to the FIU.

The FIU will investigate these cases, forwarding them to relevant authorities like the Central Bureau of Investigation of Nepal Police for further action.

Gold prices witness slight rise

The domestic market on Tuesday witnessed a rise in gold prices by Rs 100. According to the Nepal Gold and Silver Dealers’ Association, the price adjustment had set the rate for fine gold at Rs 142,300 per tola, whereas standard gold was valued at Rs 141,600 per tola.

This marked an increase from the previous day’s rate of Rs 142,200 per tola. In contrast, silver prices had remained steady at Rs 1,805 per tola. It’s noteworthy that one tola is approximately equivalent to 11.66 grams.

This fluctuation in gold prices had reflected ongoing market dynamics, influenced by various economic factors and global trends impacting precious metal valuations.

Surge in EV imports from China signals market shift in Nepal

In 2019-20, Nepal saw a surge in electric vehicle (EV) imports from China, totaling 236 units valued at Rs674 million. This marked a significant increase compared to the previous five years, indicating a shift towards EV adoption over traditional combustion engine vehicles.

During the same fiscal year, imports of fossil fuel-consuming vehicles declined sharply to 3,537 units worth Rs4.21 billion.

Overall vehicle imports, however, rose from Rs65.02 billion to Rs80 billion in the first 11 months of 2023-24. EV imports from China dominated, accounting for 69 percent of Nepal’s total EV imports, valued at Rs21 billion.

The market is currently led by BYD, with its models Atto and Dolphin being popular choices. The government’s recent adjustments to customs and excise duties on EVs are expected to impact future sales minimally.

Govt forms Committee to recommend SEBON Chairman

Following the cancellation of the previous process due to disagreements among ruling parties, the government has formed a three-member committee to recommend the new chairman of the Securities Board of Nepal (SEBON).

Prime Minister Pushpa Kamal Dahal and CPN-UML President KP Sharma Oli agreed to initiate this fresh selection process during a Council of Ministers meeting.

The committee, led by Min Bahadur Shrestha of the National Planning Commission, includes Madhu Kumar Marasini from the Ministry of Finance and Professor Uday Niraula. Former SEBON Chairman Ramesh Hamal’s tenure ended on January 5, leaving the position vacant.

Today’s foreign currency exchange rates

The Nepal Rastra Bank (NRB) has set the foreign currency exchange rates for today (July 3).

According to NRB, the US dollar saw a modest increase against the Qatari riyal, while the Euro and British Pound declined on Wednesday.

The buying rate for one US dollar has reached 133 rupees 32 paisa, with a selling rate of 133 rupees 92 paisa.

Similarly, the buying rate for one Euro is 142 rupees 90 paisa, and the selling rate is 143 rupees 54 paisa.

The buying rate for one British pound is 168 rupees 58 paisa, and the selling rate is 169 rupees 34 paisa.

According to Nepal Rastra Bank, the buying rate for one Qatari riyal is 36 rupees 57 paisa, and the selling rate is 36 rupees 74 paisa.

(Compiled and prepared by Srija Khanal)

Economic Digest is a daily morning economic digest, basically relatable summations of the most important business news, and happenings from Nepal into easy-to-understand summaries.