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.

Nepal’s economic landscape shows a mix of cautious optimism and persistent structural challenges. The NEPSE index began the week with a notable drop of over 31 points, accompanied by reduced trading volume and broad-based sectoral declines, reflecting subdued investor confidence.

In contrast, gold prices surged past Rs 200,000 per tola for the first time, suggesting increased demand for safe-haven assets amid market uncertainty. On the monetary policy front, Nepal Rastra Bank (NRB) maintained the counter-cyclical buffer at zero percent to support liquidity, while also withdrawing excess liquidity through short-term deposit instruments.

It has strengthened regulatory oversight by mandating that banks allocate at least 1% of net profits toward targeted CSR activities and by directing the implementation of updated concessional loan subsidy guidelines.

Trade data presents a mixed picture: cardamom exports nearly doubled year-on-year in value and volume, yet FDI realization remains disappointingly low, with only Rs 12 billion invested against Rs 65 billion pledged. On the infrastructure front, delays in the embossed number plate rollout and the Kohalpur–Surkhet transmission line underline logistical bottlenecks.

However, progress is seen in key projects like the Nagdhunga tunnel and the long-stalled second phase of the Kathmandu Ring Road. Additionally, the government is engaging diplomatically with China to facilitate agricultural exports, a move that could help diversify trade.

Meanwhile, the launch of new financial products, such as Machhapuchchhre Bank’s dividend declaration and Himalayan Life’s large-cap mutual fund, signals efforts to stimulate capital markets. Collectively, these developments highlight a transitional phase in Nepal’s economy—balancing policy-driven recovery efforts with enduring implementation gaps.

NEPSE opens week in red; down 31 points

The Nepal Stock Exchange (NEPSE) started the week in negative territory, with its index dropping by 31.17 points (1.12%) on Sunday. The sensitive and float indices also declined, and trading activity shrank—turnover fell to Rs 6.6 billion from Rs 8.9 billion last Thursday. Of the listed companies, 21 ended with gains, 228 fell, and one remained unchanged. Unnati Sahakarya Laghubitta posted the highest gain (6.77%), while Nepal Republic Media led losses with a 7.45% drop. Key sectors including development banks, finance, hydropower, and tourism all saw declines.

NOC cuts diesel and kerosene prices by Rs. 4

The Nepal Oil Corporation (NOC) announced a reduction in the prices of diesel, kerosene, and domestic aviation fuel, effective from midnight Sunday. According to Managing Director Chandika Prasad Bhatta, diesel and kerosene prices have been reduced by Rs 4 per liter, while domestic aviation fuel has dropped by Rs 1 per liter. Petrol and LPG prices remain unchanged. The adjustment follows the latest purchase rates from Indian Oil Corporation (IOC), with diesel reduced by Rs 3.96 per liter, petrol by Rs 0.21, and aviation fuel by Rs 1.48. Following the revision, the retail price of diesel in the Kathmandu Valley is Rs 144 per liter. Prices for fuel used in international flights have also been reduced by USD 7 per kiloliter.

Gold price surpasses Rs 200,000 per tola

Gold prices have crossed the Rs 200,000 mark—up Rs 3,000 in a day—reaching Rs 203,600 per tola, the highest recorded. Silver also surged Rs 65 to new highs. Price jumps were driven by global trends and strong demand.

Clean notes exchange starts from September 14

Ahead of Dashain, Nepal Rastra Bank announced that clean banknotes can be exchanged from September 14 to 26 at its Thapathali office, provincial offices, and selected authorized banks during working hours.

NRB maintains countercyclical buffer at zero percent for FY 2025/26

Nepal Rastra Bank (NRB) has reduced the countercyclical buffer to zero percent under its Capital Adequacy Framework, aiming to boost banks’ liquidity and support economic growth.

NRB withdraws liquidity through 21day deposit collection instrument

To manage excess liquidity, NRB has launched a 21day deposit collection facility. Banks and financial institutions could participate via online bidding until 3 PM, bidding in multiples of Rs 50 million for amounts over Rs 100 million. Only Class A, B, and C institutions are eligible.

Minister assures urea fertilizer available within 10 days

Agriculture and Livestock Development Minister Ramnath Adhikari announced that a shipment of urea fertilizer from India will arrive in 7–10 days. He emphasized that distribution will be based on actual landholding and production requirements to ensure equitable allocation.

Finance minister says government working to improve investment climate

Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel affirmed efforts to foster an investor-friendly environment at the Trekking Agencies Association of Nepal (TAAN) AGM. He reiterated commitments to tourism development and national economic progress.

Govt faces tight deadline to install 2.5M embossed number plates by November 27

A major logistical challenge faces the government: printing and fitting 2.5 million embossed vehicle number plates by November 27. To date, 1.2 million plates have been ordered and 800,000 printed. Missing the deadline could result in penalties under the contract.

NRB monitors CSR spending of banks and financial institutions

Nepal Rastra Bank has introduced oversight measures requiring banks and financial institutions to allocate at least 1% of net profits toward CSR initiatives targeting underprivileged and marginalized groups.

FDI commitments fall short: only Rs 12 billion invested against Rs 65 billion commitment

In the fiscal year 2024/25, total FDI pledges reached Rs 65 billion, but only Rs 12 billion was actualized—just 18.5% of the commitment—across 840 businesses.

Air India to hand over ground handling in Nepal to Nepal Airlines

Air India plans to transfer its self-ground handling operations in Nepal to Nepal Airlines, retaining only a technical support role. Agreements between the two carriers are being finalized by officials.

NRB directs banks to implement interest subsidy for concessional loans

Following the government’s approval of updated interest subsidy guidelines, the Nepal Rastra Bank has instructed banks to implement the new unified procedure, replacing the previous 2018 framework that facilitated Rs 10 billion in subsidy claims.

Cardamom exports nearly double in first month of FY 2025/26

Cardamom exports surged 99.5% in the first month of the fiscal year—reaching Rs 32.17 crore compared to Rs 16.13 crore last year—according to the Department of Customs. Export volume rose from 87,900 kg to 216,150 kg, with all shipments sent to India.

Industrial rent dispute: federation refuses to pay full rent

Industries operating under Industrial Area Management Limited are withholding rent payments after new bills reflected old rates. The Nepal Industrial Area Industry Federation said this comes despite the FY 2025/26 budget’s provision of a 50% rent reduction, which has yet to be implemented.

Final design of second ringroad section expected within a month

The Chinese survey team finished work on the second section of the Kathmandu Ring Road in midAsar. The Department of Roads expects to receive the final design within a month, after which the tendering process will begin. This section has been in discussion for over seven years.

Nepal seeks facilitation for exports to China

In a meeting with China’s vice minister of customs, Nepal’s Agriculture Minister Ramnath Adhikari requested smoother customs procedures for agricultural exports including buffalo meat, dairy, vegetables, fruits, and herbs. China responded with a positive outlook toward facilitating trade.

Nagdhunga tunnel to go commercial from January 1, 2026

With construction now 94.5% complete, the Nagdhunga tunnel is slated for commercial operation from January 1, 2026, according to Secretary Keshav Sharma. A privatesector tender will soon be launched to finalize remaining work by October.

Kohalpur–Surkhet 132 kV line must be completed by Tihar

The Rs 700 million Kohalpur–Surkhet 132 kV transmission line, contracted to India’s RS Infraprojects in July 2019, remains incomplete in Surkhet. Authorities have directed completion before the Tihar festival.

Machhapuchchhre Bank declares 8% dividend for FY 2024/25

Machhapuchchhre Bank has become the first commercial bank in Nepal to announce dividends from FY 2024/25 profits. Shareholders will receive an 8% dividend—4% in bonus shares and 4% in cash—totaling Rs 92.97 crore from paid-up capital.

Himalayan Life launches applications for largecap mutual fund

Himalayan Life Insurance has opened applications for its new HLI Large Cap Fund, issuing 200 million units to the public and associations, while retaining 200 million units for the promoter itself. Investors can subscribe from 100 to 40 million units.