KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Gold prices hit a new record high
Gold prices hit a new record high, with fine gold now priced at Rs 150,000 per tola, marking a notable increase of Rs 300 per tola from recent levels.
This surge adds to the substantial price hikes observed in recent weeks, reflecting a continued upward trend in the gold market.
The new peak was reported by the Nepal Gold and Silver Dealers’ Association, underscoring the significant rise in gold’s value.
The record-setting price can have various economic implications. High gold prices may indicate strong demand or potential currency devaluation, potentially impacting consumer behavior and industry costs.
Investors might see this as a signal to invest in gold as a safe-haven asset.
Overall, the continuous rise in gold prices highlights important economic trends and could affect both market dynamics and consumer spending.
Nabil Bank tops with Rs 7.06 billion profit as sector shows mixed performance in Q4 FY 2080/81
The Q4 FY 2080/81 Financial Report for Nepal’s commercial banks shows a diverse performance landscape.
Nabil Bank led the sector with a notable net profit of Rs 7.06 billion, reflecting a 10.23% increase from the previous fiscal year. Global IME Bank and Nepal Investment Mega Bank followed with profits of Rs 6.01 billion and Rs 5.19 billion, respectively.
In contrast, Machhapuchhre Bank recorded the lowest profit of Rs 1.25 billion, highlighting a wide disparity in financial performance across the sector.
Significant profit growth was observed in banks such as Prabhu Bank, which reported an extraordinary 1499.04% increase, largely due to adjustments in previous financial statements.
However, some banks faced substantial declines, with NIC Asia Bank’s profit dropping by 68.91%, Nepal Bank’s by 51.80%, and Citizens Bank International’s by 27.97%.
These variations underline the sector’s complex dynamics, where individual bank strategies and external conditions contribute to varied financial outcomes.
Commercial banks post Rs 64.15 billion profit in Q4 of FY 2080/81, Led by Nabil Bank’s 10.23% growth
In the fourth quarter of the fiscal year 2080/81, twenty commercial banks reported a combined net profit of Rs 64.15 billion, according to unaudited financial statements.
Nabil Bank led the profit rankings with Rs 7.06 billion, reflecting a 10.23% year-on-year increase, followed by Global IME Bank at Rs 6.01 billion and Nepal Investment Mega Bank at Rs 5.19 billion.
Machhapuchhre Bank recorded the lowest profit at Rs 1.25 billion, while Citizens Bank International and NIC Asia Bank reported profits around Rs 1.3 billion, and Nepal Bank earned Rs 1.65 billion.
Prabhu Bank showed the most significant growth with a remarkable 1499.04% surge in net profit, while Kumari Bank, Prime Commercial Bank, and Agriculture Development Bank experienced profit increases of 345.67%, 267.19%, and 176.23%, respectively, largely due to adjustments in the previous fiscal year’s financial statements.
Conversely, ten commercial banks experienced declines in net profit, with NIC Asia Bank seeing the largest drop at 68.91%, followed by Nepal Bank at 51.80% and Citizens Bank International at 27.97%.
Department of Industry urges foreign firms to fulfill investment commitments or face penalties
The Department of Industry (DoI) has issued a warning to approved foreign firms, demanding they fulfill their pledged investments within 35 days or face penalties.
The notice emphasizes the need for these companies to commence business operations; failure to do so will result in the confiscation of their deposited amounts.
This warning comes amid concerns that actual foreign direct investment (FDI) inflows are significantly below commitments, with only 15% of promised investments realized in the first 10 months of FY 2023/24.
While 402 foreign firms pledged a total of Rs 61.78 billion, actual receipts were only Rs 8.16 billion.
Over the past 13 years, Nepal has seen Rs 425.72 billion in FDI commitments but only Rs 148.87 billion realized, highlighting a realization rate of just one-third.
The World Bank’s 2022 report noted that Nepal’s FDI inflow is the lowest in South Asia, at 0.5% of GDP, and calls for regulatory reforms to improve this situation.
The DoI has also tightened business visa regulations to curb misuse by foreign investors registering firms solely to extend their visas.
Additionally, foreign investors can report issues related to operations, including visa and land use, to the DoI.
NTIS fails to boost Nepal’s high-value exports
A year after implementing the Nepal Trade Integration Strategy (NTIS) 2023, Nepal’s export of high-value products grew only 10% in the last fiscal year, far below expectations.
The strategy aims to enhance trade as Nepal prepares to graduate from least developed country status by 2026.
Export earnings from NTIS-identified goods totaled Rs 110.38 billion, while total exports reached Rs 152.38 billion.
Despite the ambitious goals, implementation challenges, budget constraints, and lack of coordination among government bodies hinder progress.
While some sectors, such as iron and steel, saw significant growth, exports of several traditional products declined sharply.
Experts warn that Nepal’s low performance in high-value goods exports could jeopardize its graduation prospects and market access benefits under existing preferential trade schemes.
649 cottage industries registered in Kaski last FY
The Tourism and Industry Office Kaski recorded 649 new business firms in the last fiscal year.
In the fiscal year 2080/81 BS, 13 cottages and 636 small industries were registered in Kaski.
Maharaj Dhakal, Chief Industry Officer of the Cottage and Small Industries Office in Kaski, said that Rs 1.91 billion in capital has been invested from the new industry registrations.
US Dollar hits an all-time high on Tuesday
Nepal Rastra Bank (NRB) has reported significant shifts in foreign currency exchange rates today, reflecting a notable appreciation of the US dollar, which has reached an all-time high.
The US dollar’s buying rate is NPR 133.86 and the selling rate is NPR 134.46, up from yesterday’s rates of NPR 133.71 and NPR 134.31 respectively.
Similarly, the Euro, British pound, Australian dollar, Kuwaiti dinar, and Bahraini dinar have all experienced depreciation against the Nepalese rupee.
For example, the Euro’s buying rate has increased to NPR 146.56 from NPR 145.86, and the Australian dollar’s buying rate has decreased to NPR 86.31 from NPR 87.05.
These changes indicate a general weakening of other foreign currencies in comparison to the strengthening US dollar.
Likewise, the industries created 2,057 jobs.
(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.
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