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 mixed signals, with the capital market weakening as NEPSE continues to slide and turnover drops sharply, even as precious metals hit record highs amid global price volatility. The Nepal Rastra Bank has adopted a more expansionary stance, cutting key policy rates, raising loan ceilings, easing restructuring norms, and permitting branch consolidation, to stimulate credit growth in a sluggish lending environment marked by rising non-performing loans.
Major sectors reflect both structural challenges and transition: hydropower is advancing with large-scale equity mobilization for the Upper Arun project; infrastructure faces setbacks with the cancellation of dozens of non-performing road contracts and tree clearances for highway expansion; trade disruptions persist as the Kerung border closure inflicts heavy revenue losses; and businesses grapple with added costs such as the ECTS system.
Meanwhile, agriculture shows contrasting trends, with cardamom prices surging and paddy procurement progressing, but poultry prices rising amid supply constraints. Judicial and regulatory developments—including a Supreme Court ruling on director liability and extended real estate licensing deadlines—underscore ongoing efforts to refine governance and sectoral oversight.
NEPSE slips 4.28 points as daily turnover falls to Rs 4.71 billion
The Nepal Stock Exchange (NEPSE) dipped by 4.28 points on Monday, closing at 2,645. This decline follows Sunday’s 26-point drop, with market turnover shrinking sharply from Rs 7.8 billion to Rs 4.71 billion. A total of 124 stocks gained while 126 declined. Four companies—among them Sagar Distillery and Swastik Laghubitta—hit the 10 percent upper limit.
Silver reaches all-time high at Rs 3,535 per tola
Silver prices have hit a historic high, crossing the Rs 3,500-per-tola mark for the first time. The Federation of Nepal Gold and Silver Dealers’ Association set today’s price at Rs 3,535 per tola—an increase of Rs 45 from the previous day. Gold prices also climbed by Rs 1,400 to Rs 253,600 per tola, driven by rising global market rates.
NRB loosens monetary policy, cuts key interest rates
The Nepal Rastra Bank has taken a more accommodative approach in its first quarterly monetary policy review for FY 2025/26, reducing the interest rate corridor. The standing liquidity facility (SLF) rate has been lowered from 6.00 to 5.75 percent, while the policy rate has dropped from 4.50 to 4.25 percent. The central bank has also removed the rule requiring institutional fixed deposit rates to be at least one percentage point lower than individual fixed deposit rates.
Rs 35.25 billion share issuance proposed for Upper Arun hydropower project
A proposal has been endorsed to issue Rs 35.25 billion worth of public shares for the 1,063 MW Upper Arun semi-reservoir hydropower project in Sankhuwasabha. The amount represents 49 percent of the total equity (Rs 71.94 billion), equivalent to 30 percent of the project’s overall cost of Rs 239.79 billion. Shares will be allocated to non-resident Nepalis (18%), local residents (10%), people from disadvantaged regions, and employees of the promoter. The Nepal Electricity Authority board approved the proposal on Thursday.
NRB permits banks to consolidate urban branches
The Nepal Rastra Bank has authorized banks and financial institutions to merge or consolidate their branches within metropolitan areas. This new provision—introduced in the first quarterly monetary policy review—marks a shift from the previous rule that only allowed branch consolidation among banks that had already merged. The move reflects the growing number of branches in metropolitan cities and the increasing use of digital payments.
Real estate licensing deadline extended by Land Management Department
The Department of Land Management and Archive has extended the application deadline for real estate business licensing to December 13 due to a low response to its initial call on September 29. The licensing requirement under the Land Revenue Act, 1978 aims to enhance transparency and professionalism. The first phase of regulation targets transactions exceeding Rs 30 million in six metro cities and eleven sub-metropolitan areas. The sector generated Rs 2.745 billion in revenue last month.
Kerung border closure causes Rs 18 billion revenue loss over five months
The closure of the Kerung trade point in Rasuwa—caused by floods and landslides on July 8, 2025—has left 500–600 containers of seasonal goods stuck for months. Many shipments, including winter wear meant for Teej, Dashain, and Tihar, are now at risk. According to Rasuwa Customs, the five-month shutdown has resulted in an estimated Rs 18 billion in lost revenue. Construction of a Bailey bridge is underway and expected to be operational before January after technical testing.
Overdraft ceiling doubled to Rs 10 million
In its latest monetary policy review, the Nepal Rastra Bank doubled the overdraft loan limit for individuals from Rs 5 million to Rs 10 million. The previous cap had been enforced due to concerns over misuse. The increased limit is expected to encourage greater demand for personal consumption loans.
NRB offers loan restructuring support for flood-affected borrowers
In its monetary policy review, the Nepal Rastra Bank introduced relief measures for businesses impacted by recent floods and landslides. Borrowers in affected districts—including Ilam—may restructure or reschedule their loans by paying at least 10 percent of the interest due. This one-time concession aims to ease financial pressure on disaster-hit enterprises.
Supreme Court bars blacklisting of inactive directors cleared from company roles
The Supreme Court has ruled that a former director who has completed formal separation from a company’s management cannot be blacklisted for unpaid loans. The verdict came in a dispute involving Nepal Plastron Industries. Justices Hari Prasad Phuyal and Sunil Kumar Pokharel held that imposing liability on a director who sold their shares prior to the loan issuance is unjust. The ruling emphasized that blacklisting without due process amounts to “civil death” and violates natural justice.
ECTS on rail cargo adds heavy cost burden to Nepali imports
The mandatory Electronic Cargo Tracking System for containers transported by rail from Indian ports to Nepal is adding substantial costs to importers and consumers. Importers must pay INR 7,100 per container—INR 3,300 for inbound tracking and INR 3,800 for tracking the return of empty containers. Although introduced in 2019 to reduce trade diversion and demurrage charges, traders argue the system’s benefits remain limited, especially as the government plans to expand ECTS to road cargo.
Kakarvitta customs reports widening trade deficit in four months
Mechi Customs Office in Kakarvitta recorded a trade deficit in the first four months of the fiscal year. Imports rose by 12.12 percent to more than Rs 16.2 billion, while exports fell by 4.12 percent to Rs 8.96 billion. Revenue collection reached Rs 5.46 billion—a 15.66 percent increase. Exports of cardamom, veneer sheets, and lentils grew, whereas tea, plywood, and iron sheets saw significant declines.
Slow loan growth and rising NPLs define first quarter of FY 2025/26
Despite higher deposit mobilization, lending by banks and financial institutions remained sluggish in the first quarter. Deposits rose by 3 percent to Rs 7.48 trillion, but private sector credit expanded by only 1.5 percent, down from 2.5 percent in the same period last year. Meanwhile, the average non-performing loan (NPL) ratio increased to 5.26 percent from last year’s 4.42 percent, signaling increasing credit stress in the banking sector.
Govt cancels 38 non-performing road contracts
The government has terminated 38 road and bridge contracts classified as non-performing under the Department of Roads. More termination notices are expected soon, according to department data. Contracts were canceled for failing to meet deadlines despite repeated extensions, violating basic contract terms, or being abandoned by contractors. The largest project scrapped so far is the Kankai Bridge in Jhapa, which reached just 65 percent completion after 14 years and five deadline extensions.
NRB increases microfinance collateral loan cap to Rs 1.5 million
The Nepal Rastra Bank has raised the maximum collateral-backed loan limit for microfinance institutions from Rs 700,000 to Rs 1.5 million. The decision, part of the first quarterly review of the monetary policy, also includes provisions allowing borrowers facing repayment challenges to restructure their loan schedules. The central bank aims to boost credit flow at a time of high liquidity but weak lending activity.
11,577 trees to be cut for East–West Highway expansion
Authorities have approved the removal of 11,577 trees in Sarlahi, Mahottari, and Dhanusha for widening the Kamla–Dhalkebar–Pathlaiya section of the East–West Highway to four lanes. Mahottari will see the most trees felled (6,027), followed by Sarlahi (3,674) and Dhanusha (1,876). Tree cutting has already begun in Sarlahi and Dhanusha. Project Chief Rajesh Kumar Das noted that relocating electricity poles and water pipelines remains a major challenge, though the tree-cutting issue has finally been settled.
High demand drives cardamom prices upward
Cardamom prices are projected to average around Rs 100,000 per man (40 kg) this year, prompting farmers in Taplejung to accelerate harvesting. Farmers such as Suk Bahadur Tapmaden are rushing to process and sell their crops amid volatile prices. Premium-quality dried cardamom is currently selling for up to Rs 105,000 per man. However, growers remain worried about their dependence on the Indian market, fluctuating prices, and crop diseases, and are urging the government to establish processing centers and expand alternative export markets.
Call for sovereign digital industrial policy and institutional reforms
Experts warn that Nepal urgently needs a modern industrial policy rooted in digital sovereignty—recognizing data as public infrastructure and artificial intelligence as a strategic resource. They argue that Nepal’s bureaucracy, which traditionally emphasizes control over innovation, must transform into a system that supports creativity and ecosystem-building. While the government has introduced a 39-point “Immediate Improvement Action Plan, 2025,” deeper structural issues—limited global market access, weak infrastructure, and political instability—require a comprehensive national strategy linking technology with governance and industry.
Six industries clear second installment of dedicated trunkline dues
Six major industries—Hulas Steel, Ashok Steel, Hama Iron, Laxmi Steel, Sarbottam Cement, and Shubhashree Agni Cement—have paid the second installment of their outstanding Dedicated Trunkline electricity charges to the Nepal Electricity Authority. The payments were made despite the NEA sending notices requesting the dues without following the Prime Minister’s directive to revive the Administrative Review Committee to resolve disputes over premium electricity tariffs.
Chicken prices climb again, second hike in two weeks
Chicken meat prices have increased for the second time in two weeks. The Nepal Poultry Federation raised the price by Rs 10 per kg starting Monday. Live chicken now costs Rs 240 per kg, up from Rs 230, while processed chicken has risen to Rs 330 per kg from Rs 320. The Federation attributed the increase to reduced production caused by colder weather.
Food company buys Rs 26.8 million worth of paddy in Banke
The Food Management and Trading Company in Nepalgunj has purchased 7,503.20 quintals of paddy valued at Rs 26.8 million from Banke farmers since November 9. The purchase included 2,503.50 quintals of coarse paddy and 4,999.70 quintals of medium paddy. Office Chief Ram Saran Lamichhane said the annual quota of 20,000 quintals is half of last year’s, and the quota for medium paddy has already been fulfilled. Payments are being deposited directly into farmers’ bank accounts.
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