KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economy is witnessing a mix of reform-driven optimism and operational challenges across key sectors. Finance Minister Rameshwar Khanal’s assurance of policy reforms and investor protection seeks to restore business confidence following recent nationwide protests that unsettled the private sector.
The Nepal Rastra Bank’s introduction of a six-month deposit facility reflects efforts to manage excess liquidity and stabilize interest rates, while competition for deputy governor positions signals a shifting focus toward merit-based leadership. In infrastructure and development, the government’s 50-year master plan for Kathmandu Valley underscores a long-term commitment to sustainable urban growth.
Meanwhile, the NEPSE index surged on hopes of political stability, even as gold prices declined amid global easing. However, concerns persist—federal grant delays have disrupted local budgets, power line cuts have shuttered major industries, and weather-related disruptions continue to impact transport.
At the local level, initiatives like commercial black turmeric farming in Gorkha and a record orange harvest in Syangja highlight grassroots resilience and agricultural progress amid broader economic uncertainty.
Finance minister vows reforms, assures investors after nationwide protests
Finance Minister Rameshwar Khanal reaffirmed the government’s commitment to policy reforms and investor protection, urging both domestic and foreign investors to maintain confidence in the country’s economic stability. He said several reforms were already visible to the private sector.
Khanal made the remarks during a public-private dialogue organized by the Investment Board Nepal and the Nepal Industrial Federation, addressing the impact of the September 8–9 Gen-Z protests, which caused significant damage to public and private property. Federation President Birendra Raj Pandey said incidents of arson, vandalism, and looting had deeply shaken the business community.
Nepal Rastra Bank launches six-month deposit facility to absorb excess liquidity
Nepal Rastra Bank (NRB) has introduced a new monetary tool allowing banks and financial institutions to deposit surplus liquidity for up to six months. The move aims to manage growing liquidity pressures within the banking sector.
On Wednesday, the central bank invited bids for Rs 40 billion in 175-day deposits, following a Rs 90 billion, 42-day deposit tender earlier this month. This is the first time NRB has offered a deposit term longer than 64 days. Executive Director Dayaram Sharma said the initiative is intended to stabilize interest rates as more than Rs 700 billion currently remains idle in the financial system.
Govt plans 50-year blueprint for sustainable urban growth in Kathmandu Valley
The government is formulating a 50-year master plan aimed at ensuring sustainable urban development in the Kathmandu Valley. Announcing the initiative during the 650th week of the Bagmati Clean-up Campaign, Minister for Urban Development Kulman Ghising said the long-term plan will integrate key infrastructure projects such as sewage, electricity, water supply, roads, waste management, and treatment centers, taking into account projected population growth and urban expansion.
Ghising stressed that coordinated efforts among federal, provincial, and local governments, coupled with substantial investment, are crucial for river and drainage purification. He noted that the ongoing Bagmati Clean-up Campaign had inspired broader state-level planning, while the Rights-Based Bagmati Civilization Committee recommended prioritizing sewage and waste management. The total cost of implementation is estimated at around Rs 225 billion.
Gold prices fall by Rs 2,900 per tola as global market weakens
Gold prices in Nepal dropped by Rs 2,900 per tola this week, mirroring the downturn in the international market. According to the Federation of Nepal Gold and Silver Dealers’ Association (FENEGOSIDA), gold opened at Rs 241,900 per tola on Sunday and settled at Rs 239,000 on Friday. Prices fell sharply early in the week before recovering by Rs 2,700 on the final trading day. FENEGOSIDA attributed the decline to easing geopolitical tensions, improving U.S.–China trade ties, and a stronger U.S. dollar.
Meanwhile, silver gained Rs 45 per tola to reach Rs 3,060 by week’s end, supported by steady domestic demand.
NEPSE rises by 96 points as investor optimism grows amid stability hopes
The Nepal Stock Exchange (NEPSE) climbed 96.53 points, or 3.86 percent, last week on renewed investor confidence linked to expectations of political stability. The benchmark index opened at 2,503.85 on Sunday and closed at 2,600.38 on Thursday. Weekly turnover reached Rs 20.20 billion, with daily averages rising from Rs 2.79 billion to Rs 5.05 billion.
All 13 trading groups recorded gains, led by the hydropower sector, which advanced 6.34 percent. Himalayan Bank’s promoter shares registered the highest turnover of Rs 1.66 billion. Total market capitalization expanded by Rs 162 billion to Rs 4.347 trillion. Among individual stocks, Radhi Bidyut Company surged 20.03 percent, while Taragaon Regency saw the steepest decline at 9.55 percent.
Race intensifies for NRB deputy governor posts as terms near expiry
Competition has intensified for the two deputy governor positions at Nepal Rastra Bank, with the terms of current deputies Dr. Nilam Dhungana Timsina and Bam Bahadur Mishra expiring in Falgun. Eighteen executive directors are contesting the posts, which by law must be filled from within their ranks.
The NRB governor will recommend four candidates to the Cabinet, which will select two. With no political party currently leading the government, the decision largely rests with Finance Minister Rameshwar Khanal and Governor Prof. Dr. Bishwanath Paudel. Unlike past politically influenced appointments, this round is expected to focus on merit, competence, and experience.
Partial and delayed federal grants disrupt provincial and local budget execution
The National Natural Resources and Fiscal Commission (NNRFC), in its seventh annual report, has stated that delayed and incomplete transfers of federal grants have hampered budget implementation at provincial and local levels. In FY 2081/82, although the commission recommended Rs 60 billion for provinces and Rs 88 billion for local governments, only 91.76 percent and 91.74 percent were disbursed, respectively.
Some provinces, including Lumbini (99.75 percent) and Karnali (98.91 percent), also failed to fully allocate grants to local units. The report further pointed out a lack of clarity on conditional grants and noncompliance by certain local bodies with borrowing procedures from the Municipal Development Fund.
Continuous rain heightens landslide risk along Narayangadh–Muglin road corridor
The Chitwan District Administration has warned travelers of heightened landslide risks along the Narayangadh–Muglin and Muglin–Malekhu road sections following days of continuous rainfall. Minor landslides have already been reported, disrupting traffic flow and making travel hazardous.
Although authorities have cleared some debris to reopen the highway, officials caution that new slides may occur at any time. Chief District Officer Ganesh Aryal advised people to avoid unnecessary travel and contact local police or traffic offices for real-time updates before setting out.
Gorkha leader starts commercial black turmeric farming to empower youth and boost local economy
Commercial farming of black turmeric has begun in Gorkha under the initiative of CPN (Unified Socialist) district chairperson Yadab Basnet. Partnering with Kabita Aryal, Basnet has invested Rs 5 million to establish B and B Agriculture Farm on 25 ropanis of land in Laxmibazar, Gorkha Municipality–9. The farm has planted 23,000 black turmeric saplings sourced from Dolakha.
Cultivated organically without chemical inputs, the crop is prized for its medicinal properties and growing demand. Basnet said the project aims to generate jobs, promote self-reliance, and demonstrate how politics can align with productive entrepreneurship. Local officials hailed the venture as a model for rural economic transformation.
Power line cuts force closure of 25 industries amid NEA–business dispute
Twenty-five major industries, including six affected immediately after Lakshmi Puja, have shut down after the Nepal Electricity Authority (NEA) disconnected their power supply over unpaid charges for dedicated and trunk lines. The dispute stems from additional premium fees levied during Kulman Ghising’s tenure as NEA managing director—charges that industries claim were illegal since their electricity bills had already been paid in full.
The shutdown has halted production, endangering more than 25,000 jobs and causing significant financial losses. Critics accuse NEA of bypassing due legal process and acting unilaterally in enforcing disputed tariffs, turning what began as a billing disagreement into a major economic and regulatory controversy.
Passengers in Humla rely on lottery system amid severe flight shortage
Air passengers in upper Humla have been forced to depend on a lottery system to obtain flight tickets as return flights from Kathmandu remain scarce. Sita Air introduced the system after demand far outstripped available seats, with roughly 100 people competing for each limited flight. Only a few passengers have managed to secure tickets, leaving many stranded for days.
Local residents expressed frustration over recurring flight shortages, especially after the Dashain–Tihar festivals. Sita Air said the lottery was the fairest method under the circumstances. Currently, only a few flights operated by Nepal Airlines, Sita, Tara, and Summit Air serve the route each week.
Syangja anticipates record orange harvest as favorable weather boosts yield
Orange production in Syangja district is expected to reach record levels this year due to favorable weather and reduced pest infestation, according to agricultural authorities. The cultivation area has expanded dramatically—from 850 hectares eight years ago to 2,350 hectares today.
Last year, farmers harvested about 19,000 metric tonnes of oranges, earning Rs 1.12 billion in revenue. With fruit ripening and strong market demand, traders are already visiting villages to purchase produce. Backed by federal, provincial, and local programs, orange farming now covers all 11 local units of Syangja, emerging as a key source of income for rural households.
FMTC begins paddy procurement after farmers voice frustration over delays
The Food Management and Trading Company (FMTC) has begun purchasing paddy from its Dhangadhi Provincial Office following farmer complaints about delays in the government’s procurement program. Collection has started at six sub-centres in Kailali, with 12 quintals purchased on the first day. Only paddy meeting quality standards—below 18 percent moisture and with minimal foreign matter—is being accepted.
FMTC plans to procure 35,000 quintals from Dhangadhi in the first phase and around 180,000 quintals nationwide through 13 centres. The government has set prices at Rs 3,463.81 per quintal for coarse paddy and Rs 3,628.33 for medium varieties. Farmers lacking access to FMTC centres continue to sell to private traders at lower rates.
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