Nepal’s economic landscape is experiencing heightened volatility amid political unrest, with the NEPSE index plunging sharply below the 2,700 mark due to Gen Z-led protests, signaling shaken investor confidence. While trading volumes surged, nearly all sectors registered losses, underscoring market fragility.
Meanwhile, the government is aggressively pursuing internal borrowing through Treasury bills as banks shift investments to safer instruments amid falling interest rates, which have reached a 13-year low. Foreign investment remains highly concentrated—both geographically and sectorally—while delays in national infrastructure projects and contentious state involvement, such as DDC’s dairy plant in Pokhara, expose structural inefficiencies.
Despite the ban on major social media platforms, foreign currency inflows from digital channels remain strong, although internet providers warn of significant revenue hits. On the trade front, the full reopening of the Korala border signals new economic prospects, while agriculture shows signs of revival with a projected 25% rise in cardamom output.
These developments reflect a complex interplay of political instability, cautious financial realignment, and mixed signals across trade, industry, and infrastructure.
NEPSE drops 35.99 points; all sectors lose amid Gen Z protest
The Nepal Stock Exchange (NEPSE) fell sharply on Monday, dipping 35.99 points to close at 2,672—a decline below the key 2,700 mark—as violent protests by Gen Z demonstrators in Kathmandu shook investor confidence. Trading activity surged, with volume rising to NPR 5.23 billion from NPR 4.40 billion the previous day. Among listed companies, 22 recorded gains, while a majority—229—registered losses. All major sectors suffered, including banking (−1.12 %), hydropower (−1.38 %), and trading (−3.31 %).
Gold price drops slightly after weekend high
Gold prices dipped slightly on Monday after reaching a record high the previous day. According to the Federation of Nepal Gold and Silver Dealers Association, the price dropped by Rs 400 per tola—from Rs 212,000 on Sunday to Rs 211,600 on Monday. Silver also declined by Rs 25 per tola.
Government to raise Rs 8.50 billion through 91-day Treasury bills
The government is set to raise Rs 8.50 billion today under its 91-day Treasury Bills program. For the current fiscal year, the internal borrowing target stands at Rs 3.62 billion, of which Rs 1.30 billion is earmarked for Treasury bills. With banks flush with liquidity, officials are increasingly turning to internal debt and longer-term bills to manage funding.
Nepal Stock Exchange directs timely financial reporting
NEPSE has issued new instructions to listed companies to adhere strictly to prescribed formats and deadlines for financial disclosures. A circular released on Sunday mandates that audited annual financial statements must be submitted within five months of fiscal year-end, and quarterly reports—detailing earnings per share and price-to-earnings ratios—must be filed within 30 days of quarter-end.
Foreign investment in Nepal concentrated in three countries
A 2024 survey by Nepal Rastra Bank shows foreign investment pouring in from 60 countries, but just three of them account for over half of the total inflows. As of the survey period, total foreign investment stood at Rs 332.97 billion—comprising Rs 168.61 billion in paid-up capital, Rs 122.02 billion in reserves, and Rs 48.32 billion as loans.
Commercial banks increase investment in monetary instruments
As interest rates fall and borrowing costs rise, commercial banks are redirecting funds into monetary instruments issued by both Nepal Rastra Bank and the government. The Public Debt Management Office noted that bids for two Treasury bills offered on September 1—one 91-day and another 364-day—totaled nearly eight times the required amount, signaling strong demand.
Foreign investment in Nepal focused on three key sectors
Foreign investors have concentrated their investments in electricity, productive industries, and financial services. Electricity retained the top share with Rs 9.833 billion (29.5 %), followed by productive industries at Rs 9.756 billion (29.3 %), and the financial sector at Rs 8.139 billion (24.4 %) of the total Rs 33.2 billion invested.
Weighted average loan interest rate falls to 13-year low in Nepal
In Asar (mid-July), the weighted average interest rate on loans from banks and financial institutions dropped to 7.85 %—the lowest in 13 years since introduction in 2012. Experts say the rate reflects eased liquidity conditions and is the lowest on record for Nepal.
Internet service providers concerned over social media ban
Internet service providers have raised concerns following the government’s ban on major social media platforms. Since about 80 % of internet data usage is attributed to social media, including Facebook, WhatsApp, and YouTube, the shutdown could significantly reduce data consumption and impact telecom revenues.
Cost of national pride projects increasing due to government inaction
Implementation delays are inflating the costs of Nepal’s national pride projects. Data from the National Planning Commission reveals that, aside from two added in fiscal year 2024/25, the costs of all existing projects have at least doubled. There are now 27 such projects in total.
Social media ban fails to halt foreign currency inflows
Despite blocking 26 unregistered social media platforms—including YouTube, Facebook, Instagram, and WhatsApp—Nepal still received Rs 3.53 billion in foreign currency from these platforms during fiscal year 2024/25. Five registered platforms—TikTok, Viber, Nimbuzz, Bitk, and PopoLive—remain operational and continue to contribute inflows.
Korala border in Mustang fully reopens for trade and transit
The Korala border crossing in Mustang, which connects to the Tibet Autonomous Region of northern China, is now fully operational. Previously, since November 13, 2023, the border remained open year-round only for Upper Mustang residents. As of Sunday, it has been opened for all types of movement. To support plans of developing this route into a commercial trade hub, the Customs Department has appointed Ramesh Khadka as the chief of the Mustang Customs Office.
Private sector opposes DDC’s milk plant plan in Pokhara
The Dairy Development Corporation’s (DDC) plan to establish a milk processing and packaging plant in Pokhara has met with resistance from private sector groups. The Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the Pokhara Chamber of Commerce and Industry, and the Nepal Dairy Industry Association have expressed dissatisfaction with the DDC’s move, citing concerns over market competition and fairness.
Environmental assessment for Surkhet Ramghat Airport made public
The Environmental Impact Assessment (EIA) for the Bheriganga Ramghat Airport in Surkhet has been released. Intended to serve as an alternative airport for Karnali Province’s capital, the project spans 218.26 hectares across wards 9, 10, and 11 of Bheriganga Municipality. The report was presented during a public hearing, marking a key milestone in the airport’s development process.
Cardamom production projected to rise 25% this year
After years of decline, Nepal’s cardamom production is expected to rebound significantly this year. According to Nirmal Bhattarai, former president of the Nepal Cardamom Business Association, output is projected to increase from 4,500 metric tons last year to around 6,000 metric tons—an estimated 25% growth. The bulk of cardamom usually arrives in markets during September and October.
Pashupati Iron & Steel sees business growth
Pashupati Iron & Steel, owned by industrialist Pashupati Murarka, reported business growth during the last fiscal year. In the first nine months alone, the company recorded trade worth Rs 2.362 billion—13% higher than the same period a year earlier. Total trade for 2024 stood at Rs 2.787 billion.
City Hotel opens rights share applications
City Hotel has opened applications for its rights share offering as of Monday. The company is issuing shares at a 1:0.8 ratio, aiming to raise Rs 133 million—80% of its current paid-up capital of Rs 167.4 million. According to sales manager Prabhu Capital, shareholders can apply until September 28.
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