KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
On Thursday, the NEPSE Index in Nepal saw a slight rise of 0.20%, ending at 2,974.46 points, amidst active trading with a turnover of Rs. 19.16 billion.
Gold prices fell by Rs. 1,100 per tola to Rs. 151,900, and silver prices also decreased marginally.
Bank lending rates have dropped to a 30-month low of 9.93% due to weak loan demand, despite a significant reduction from previous peaks.
Meanwhile, MCA-Nepal is on track to complete U.S. funded projects, including cross-border electricity transmission and road maintenance, within the five-year timeline, having made notable progress and received additional funding.
NEPSE Index up 0.20% amid significant trading activity
The NEPSE Index on Thursday saw a modest increase of 0.20 percent, closing at 2,974.46 points, up by 6.01 points from the previous session’s close of 2,968.44 points.
The day began with the index at 2,974.78 points and experienced significant volatility, peaking at 3,018.93 points and dipping to 2,967.47 points before settling at its final value.
The trading session was marked by substantial activity, with 333 stocks traded through 216,455 transactions, totaling 40,951,720 shares and generating a turnover of Rs. 19.16 billion.
Market capitalization rose to Rs. 4.72 trillion, and float market capitalization reached Rs. 1.66 trillion.
Gold prices drop by Rs 1,100 per tola
Gold prices in the domestic market fell by Rs 1,100 per tola, settling at Rs 151,900 per tola on Thursday.
This decline follows a peak of Rs 153,000 per tola reached on Wednesday, marking a notable drop from the previous day’s record high.
Similarly, silver prices also saw a reduction, with the price per tola decreasing by Rs 5, from Rs 1,835 on Wednesday to Rs 1,830 on Thursday.
This decrease in both gold and silver prices reflects a significant shift in market dynamics, which may indicate changes in demand or other underlying economic factors impacting precious metals.
Bank lending rates hit 30-month low amid weak loan demand
Commercial banks have reduced their lending interest rates to a 30-month low of 9.93 percent per annum as of mid-July 2023, following a peak of 13.03 percent in March 2023.
Despite this decrease, banks face challenges in expanding their loan portfolios due to weak demand.
The average lending rate has fallen by about 2.4 percentage points over the past year, while the base interest rate for deposits stands at 8 percent and deposit rates average 5.77 percent.
The credit-deposit ratio has declined to 78.98 percent, below the regulatory cap of 90 percent.
With substantial idle funds, banks are increasingly depositing money with the Nepal Rastra Bank, which recently accepted proposals for Rs 200 billion from 80 institutions.
PM Oli assures full collection of NEA dues without disrupting power supply
Prime Minister KP Oli has assured that the arrears from the Nepal Electricity Authority’s dedicated feeders and trunk lines will be collected in full.
In response to questions from MPs during Thursday’s House of Representatives meeting, PM Oli stated that the government intends to collect these dues without cutting off power supplies to industries.
MCA-Nepal reaffirms commitment to US-funded projects
Millennium Challenge Account-Nepal (MCA-Nepal) officials have confirmed their commitment to completing the cross-border electricity transmission and road maintenance projects funded by a $500 million U.S. grant within the five-year timeline.
MCC Nepal Compact reported progress despite initial hurdles, including awarding contracts for three substations and selecting a contractor for an 18-kilometer border transmission line.
MCC Resident Country Director Diane L. Francisco and U.S. Ambassador Dean R. Thompson praised the project’s momentum and leadership. MCA-Nepal has also received an additional $197 million from the Nepalese government.
Key achievements include a $1 million Livelihood Restoration Program and progress on land acquisition and environmental permits.
Future goals include advancing the remaining transmission line and road maintenance projects, with a focus on sustainable practices and technical assistance in the power sector.
(Prepared by Srija Khanal)
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