Economic Digest: Nepal’s Business News in a Snap

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

The Nepal Telecommunications Authority (NTA) has demanded Rs 19 billion from Ncell for its mobile service license renewal, including fines for missing the original May 29 deadline.

Ncell’s partial payment of Rs 4 billion and request for installment settlement have prompted a warning of possible license revocation.

Meanwhile, the Nepal Rastra Bank (NRB) has revised its monetary policy, lifting the Rs 200 million cap on margin loans for promoter shares and introducing new provisions for the construction sector and energy investments.

Additionally, Nepal has seen a drop in foreign tourist arrivals to 64,599 in July, although this marks an 11.91% increase from last year, with a significant decline from June’s 76,736 tourists.

NTA asks Ncell to pay Rs 19 billion, warns of license revocation

The Nepal Telecommunications Authority (NTA) has issued a directive to Ncell demanding the payment of Rs 19 billion for the renewal of its mobile service license. This amount covers both the renewal fees and associated fines.

Ncell was initially required to pay Rs 20 billion by May 29 to renew its license.

However, the company missed this deadline, leading to an additional Rs 3 billion in penalties.

By the deadline, Ncell had only paid Rs 4 billion, roughly 20 percent of the total sum, and had requested to settle the remaining amount in installments.

NRB removes Rs. 200 million limit on institutional share collateral loans

The Nepal Rastra Bank (NRB) has released a new circular updating its monetary policy for the fiscal year 2081/82 BS.

The revised guidelines eliminate the Rs. 200 million cap on margin loans for promoter shares, replacing it with a Rs. 150 million limit for individual customers, though this does not affect institutional investors focused on stock market investments.

The NRB has also specified that forced loans from construction contractors will only be blacklisted if overdue by one year.

Additionally, new provisions for fund-based and non-fund-based loans in the construction sector have been introduced, and investments in energy bonds by public institutions and companies will now count towards the energy sector investment limits.

Nepal witnesses decline in tourist arrivals

Nepal has experienced a decline in foreign tourist arrivals due to the off-season, with only 64,599 tourists arriving by air in July.

Although this number represents an 11.91 percent increase compared to July of the previous year, it is notably lower than June’s total of 76,736 tourists.

In July, 21,491 tourists came from India, while the US had 7,834 visitors and China had 6,819. The UK contributed 3,806 tourists, Bangladesh 3,470, Australia 1,901, South Korea 1,537, Malaysia 1,125, and Japan 1,114.

Earlier this year, Nepal saw a peak in tourist numbers with 128,000 foreign visitors in March.

However, the numbers fell to 111,000 in April and continued to drop to 90,000 in May.

Stable foreign currency exchange rates

The stable foreign currency exchange rates announced by Nepal Rastra Bank (NRB) suggest a period of stability in the forex market, with no significant fluctuations observed for major currencies like the US dollar, euro, and British pound.

The US dollar’s sustained high value indicates ongoing demand and possibly a stable or strong economic outlook for the dollar.

The consistent rates for the euro and British pound suggest that the NRB is effectively managing exchange rate volatility, which may reflect stable economic relations with the Eurozone and the UK.

The relatively stable rates for other currencies, such as the Australian dollar and dinars, indicate a steady balance in trade and financial flows involving these currencies.

Overall, this stability might be seen as a positive sign for Nepal’s economic stability and forex management, though it also highlights the need for ongoing vigilance in monitoring international economic trends that could impact these rates.