KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
This week’s economic and policy developments in Nepal painted a complex yet dynamic picture of recovery, reform, and regional ambition. The NEPSE index’s 40-point rise, driven by increased turnover and margin lending, reflects a rebound in investor sentiment amid easing borrowing rates.
However, concerns persist as 42 hydropower IPOs stall, and a dramatic candlelight protest highlights discontent over outgoing NRB Governor Adhikari’s policies.
On the regulatory front, the central bank introduced stricter cooperative lending rules and unified foreign exchange policies to enhance financial discipline.
Meanwhile, PM Oli’s BIMSTEC address and a new Nepal-Thailand business council signal Nepal’s intent to bolster regional integration and investment. Energy remains a focal point, with Rs 86 billion in new commitments and the Upper Tamor project pioneering TBM technology.
Yet, infrastructure setbacks, such as delays in tunnel and airport projects, expose underlying governance and public engagement challenges.
NEPSE rebounds with 40-point weekly gain
Nepal’s stock market made a strong comeback this week, as the NEPSE index surged by 40.01 points to close at 2,703.39. The market showed gains on three out of four trading days, with weekly turnover increasing to Rs 26.65 billion. Market capitalization also jumped by Rs 67 billion, signaling renewed investor confidence.
Gold prices drop sharply by NPR 3,900
Gold prices in Nepal fell by NPR 3,900 per tola on Friday, with the new rate for fine gold set at NPR 176,400. Silver also dipped by NPR 125, bringing the price to NPR 1,870 per tola, according to the Nepal Gold and Silver Dealers’ Association.
PM Oli calls for revitalizing BIMSTEC Cooperation
Prime Minister (PM) KP Sharma Oli emphasized that the three pillars of the BIMSTEC Summit—Prosperity, Resilience, and Openness—not only reflect the UN’s Sustainable Development Goals but also align with Nepal’s vision of a “Prosperous Nepal, Happy Nepali.”
Speaking at the BIMSTEC Summit in Bangkok, PM Oli urged member nations to proactively embrace regional collaboration in the face of global changes. He said the summit’s theme—”Prosperous, Resilient, and Open BIMSTEC”—serves as a guiding principle that prioritizes the welfare and prosperity of the people.
Nepal and Thailand agree to form joint business council
The FNCCI and Thailand’s Chamber of Commerce have signed an MoU to establish a Joint Business Council. The agreement was formalized during a meeting in Thailand between the Thai Chamber and a visiting FNCCI delegation. This new council is expected to strengthen economic ties, promote investments, and create new business opportunities between the two nations.
NRB rolls out new rules for savings and credit cooperatives
The central bank of Nepal has issued fresh “Guidelines and Standards for Savings and Credit Cooperatives, 2081,” placing new borrowing limits on cooperatives. Under the updated rules, such entities can borrow a maximum of 5% of their total assets from banks and other financial institutions. Moreover, these borrowings must not exceed 100% of their capital fund, a move aimed at improving financial discipline within the cooperative sector.
Nepal attracts over Rs 86 billion in energy investments in 8 months
In the past eight months, Nepal has secured Rs 86.98 billion in commitments for 17 energy projects with a combined capacity of 500 MW. The largest among them is the 166 MW Super Tamor, backed by Crystal Power with Rs 34.59 billion in funding. These investments span both hydropower and solar energy.
Shareholders celebrate NRB Governor’s exit with candlelight protest
Investors staged a symbolic protest to mark the departure of NRB Governor Maha Prasad Adhikari, blaming him for policies that caused financial distress. At Bhrikutimandap, demonstrators lit candles spelling “M. OUT,” accusing Adhikari of mishandling the economy and triggering mental health crises among investors. They warned that any politically influenced appointment of a new governor could spark mass protests and demanded a reform-oriented, economically skilled successor.
Banks offer share loans at attractive single-digit interest rates
Nepali banks are offering share mortgage loans at rates between 6.28% and 10.45% thanks to high liquidity and falling base rates. Rastriya Banijya Bank is leading with the lowest rates. As of mid-Magh, margin lending has surged by 27.8% to Rs 115.11 billion, signaling increasing interest in stock market investment.
IPOs of 42 hydropower firms stalled over net worth requirement
The IPO pipeline for 42 hydropower companies is on hold due to a parliamentary directive mandating a net worth of over 90%. Industry stakeholders argue the rule is unrealistic, citing the capital strain of early-stage development. Discussions are underway to revise the regulation and update securities issuance policies to better reflect market realities.
NRB unifies foreign exchange policies in circular 2081 BS
Nepal Rastra Bank has issued Unified Circular 2081, consolidating 29 foreign exchange-related provisions. The circular allows businesses to make advance payments for imports backed by foreign guarantees and mandates guarantees for imports beyond TT limits. It also covers insurance provisions and streamlines cross-border trade regulations.
Upper Tamor Hydropower Project to pioneer TBM use in Nepal
Tamor Energy Pvt. Ltd. will implement Tunnel Boring Machine (TBM) technology in the 285 MW Upper Tamor Hydropower Project, the first in Nepal to do so. Built by China Railway Engineering Company, the 8.7-km tunnel will be completed in four years with a Rs 51 billion investment. The project is hailed as a technological breakthrough for the sector.
Bank deposits shrink by Rs 3 billion in single day
According to NRB data, total bank deposits dropped by Rs 3 billion in one day, from Rs 6.79 trillion to Rs 6.76 trillion. Commercial banks experienced a Rs 1 billion decline in loan disbursements during the same period. The interbank interest rate stood at 3%, and the CD ratio reached 79.31%.
NRB Governor Adhikari wraps up five-year tenure
Governor Maha Prasad Adhikari officially stepped down after completing his term. In a farewell press conference, he reflected on his efforts to uphold central bank autonomy and implement international standards. However, critics noted he sidestepped key controversies and policy missteps during his tenure.
Ex-NEA MD Ghising claims dismissal linked to debt recovery efforts
Former NEA Executive Director Kulman Ghising claims his removal was a result of his attempts to collect overdue payments from industrial users. At a press briefing, he questioned whether pursuing unpaid bills constitutes wrongdoing and said the public and history would eventually demand accountability.
EPF distributes NPR 5.34 billion in profits to contributors
The Employees Provident Fund has allocated over NPR 5.34 billion in profit from the last fiscal year. Of this, NPR 5.27 billion was deposited into individual savings accounts, and around NPR 64.3 million went to the pension fund. The decision was finalized during the board meeting on March 30.
Work on Nagdhunga-Sisnekhola Tunnel Road stalled due to local protest
Construction on the Nagdhunga-Sisnekhola Tunnel Road has been suspended for 20 days due to local opposition. Residents allege the project damaged water sources and caused land subsidence. Despite nearing completion, work on both the Kathmandu and Dhading sides remains halted since Chaitra 3.
26 cooperatives face deregistration for regulatory non-compliance
The Cooperative Department has begun the process of deregistering 26 cooperatives for failing to submit mandatory reports and not updating records in the COPOMIS system. Authorities have requested explanations from the affected cooperatives under the Cooperative Act and related regulations.
Tarigau Airport flights cancelled due to lack of passengers
Flights from Tarigau Airport in Dang were cancelled on Thursday because of zero passenger bookings. Despite a scheduled flight, no tickets were sold from Tulsipur, and only three were booked from Kathmandu, prompting the airline to call off the service for the day.
Agricultural exports via Kakarbhitta border reach Rs 17.73 billion
In eight months, agricultural exports through Kakarbhitta border totaled Rs 17.73 billion. Major items included tea (Rs 8.20 billion), cardamom (Rs 5.24 billion), and ply/veneer (Rs 2.73 billion). Other notable exports were ginger and broom grass (Amliso), according to quarantine officials.
National road projects lag behind targets
Road infrastructure projects are failing to meet physical and financial benchmarks, according to government reports. While the Kaligandaki Corridor achieved 73% physical progress, the Karnali Corridor managed only 24%. The Nagdhunga Tunnel is 62.5% complete. Officials acknowledged the lag in reaching planned milestones.
Private sector empowered to develop industrial zones
New government rules now allow private entities to develop and manage industrial zones, enjoying the same benefits as government-run zones. This move supports the 2018 initiative “One Local Unit, One Industrial Zone,” though only three local governments have operationalized their zones so far.
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