KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economy is showing mixed signals, with strong external-sector buffers and inflows contrasting with persistent domestic sluggishness. The stock market dipped slightly despite higher turnover, reflecting cautious investor sentiment, while banks continued to lower fixed-deposit rates amid excess liquidity that the Nepal Rastra Bank is actively absorbing.
Robust remittance growth, nearing Rs 553 billion in the first quarter, and foreign exchange reserves approaching Rs 30 trillion highlight stable external finances, yet subdued inflation—down to 1.47%—and sharply lower commercial-bank profits point to weak internal demand and lingering disruptions from recent unrest. Infrastructure progress remains uneven, with major road upgrades advancing despite long delays and the government moving to cancel hundreds of stalled contracts.
Meanwhile, regulatory reforms—from land-use amendments to new trekking-route standards—aim to boost productivity and tourism, as sectors like beekeeping show strong grassroots growth. Commodity softness persisted, with gold and silver prices falling, while corporate developments such as Nabil’s debenture listing and Himalayan Reinsurance’s profit rise signal selective momentum in the financial market.
NEPSE slips 5.15 points; turnover reaches Rs 3.89 billion
On Sunday, the first trading day of the week, the Nepal Stock Exchange (Nepse) index closed at 2,540 points, down 5.15 points from the previous session. The market showed notable intraday fluctuations, briefly dipping to 2,533 points. Daily turnover rose slightly to Rs 3.89 billion compared to Rs 3.49 billion the day before. While the Hotel & Tourism, Manufacturing & Processing, and Others indices posted modest gains, most sectors—including Banking and Development Bank—declined. Meanwhile, three newly listed companies—Sagar Distillery, Bungel Hydropower, and Bandipur Cable Car—hit the 10% positive circuit.
Foreign exchange reserves approach Rs 30 trillion
Nepal’s foreign exchange reserves reached Rs 29.79 trillion by mid-October, edging closer to the Rs 30 trillion threshold. According to NRB, reserves increased 11.3% from Rs 26.77 trillion in mid-July. In USD terms, reserves climbed 8.7% to USD 21.21 billion from USD 19.50 billion. Current reserves are sufficient to cover 19.9 months of merchandise imports and 16.4 months of combined goods and services imports, indicating strong external-sector stability.
Remittance inflows rise 35% to Rs 553 billion
Nepal received Rs 553 billion in remittances during the first quarter of the fiscal year, a 35% jump from the Rs 408 billion recorded during the same period last year. This marks the 32nd consecutive month with remittance inflows exceeding Rs 100 billion. One driver of this growth is a 17% rise in workers receiving new or renewed labor permits—200,700 this year versus 170,000 previously. Outbound remittances almost doubled as well, rising to Rs 3.76 billion from Rs 1.82 billion.
NRB set to absorb Rs 50 billion in excess liquidity
The Nepal Rastra Bank (NRB) will withdraw Rs 50 billion from the banking system through an 84-day deposit collection instrument on Sunday. The central bank has increasingly relied on longer-duration tools to manage surplus liquidity. Last Wednesday, it had already absorbed Rs 21.45 billion for a 175-day period. As of Saturday, the financial system held around Rs 62 billion in excess liquidity. The interest rate for the latest deposit collection will not exceed the lower bound of the interest rate corridor, set at 2.75%.
Gold and silver prices fall sharply in domestic market
Gold and silver prices saw a notable drop over Friday and Sunday.
Gold declined by Rs 6,900 per tola, falling from Rs 249,700 on Tuesday to Rs 242,800 on Sunday. Silver prices also slid, dropping from Rs 3,285 per tola on Friday to Rs 3,135 on Sunday, according to the Federation of Nepal Gold and Silver Dealers’ Association.
Commercial banks lower fixed deposit rates again
The average maximum interest rate on individual fixed deposits across 20 commercial banks has fallen by 0.160 percentage points for the upcoming month, dropping to 5.0405% from 5.2005% in mid-October to mid-November. Ten banks—such as NIC Asia, Prime Commercial, and Standard Chartered—reduced their rates, while the remaining ten kept them unchanged. Global IME Bank now offers the highest rate, 6%, on deposits of three years or more. The rate cuts follow an environment of ample liquidity and subdued credit demand, which is expected to push base rates and lending rates further down.
Nepal categorizes trekking routes based on altitude and duration
The Ministry of Culture, Tourism, and Civil Aviation has introduced the Trekking Route Standards Guideline 2025, providing Nepal’s first formal classification of trekking trails to support tourism development.
The new categories include: Hiking: At least 5 km, completed within a day; Easy trekking: Multi-day routes up to 3,000 meters; Adventurous trekking: Multi-day routes above 3,000 meters. Routes must be at least 5 km long, avoid motorable roads, and help preserve cultural and natural heritage. Local governments will oversee hiking trails, while federal authorities will develop adventurous routes.
Inflation remains subdued at 1.47% as food prices decline
Nepal’s year-on-year consumer inflation stood at 1.47% by mid-October. The Food and Beverage category posted a decline of 2.54%, easing household expenses, while the Non-Food and Services group recorded inflation of 3.80%. Regional inflation varied, with Koshi Province reporting the highest rate at 2.33% and Sudurpaschim the lowest at 0.69%. Analysts say the overall low inflation rate is indicative of slow economic activity.
Commercial banks’ profits fall sharply due to economic slowdown
Nepal’s commercial banks are facing mounting pressure from the sluggish economy, leading to shrinking profits and rising non-performing loans. Average Earnings Per Share (EPS) dropped to Rs 14.45 by mid-October, down from Rs 19.44 in mid-July—a fall of Rs 5.29.
Collectively, banks posted a net profit of Rs 13.14 billion in the first quarter, 18.47% lower than the Rs 16.12 billion earned during the same period last year. Analysts attribute the decline in part to economic disruptions following the violent protests of September 9.
Nabil Bank lists Rs 3 billion debenture on NEPSE
Nabil Bank’s 7% Nabil Debenture 2089, valued at Rs 3 billion, has been officially listed on the Nepal Stock Exchange. The instrument carries a tenure of eight years and includes three million units priced at Rs 1,000 each. Trading began on Thursday, following a listing agreement signed by Nabil Bank CEO Manoj Gyawali and Nepse CEO Chudamani Chapagain. Nabil Investment Banking Limited will act as the registrar for the debenture.
Nepal Bank marks 89th anniversary, highlights digital advancement
Nepal Bank Limited, the country’s oldest commercial bank, celebrated its 89th anniversary on Sunday, reflecting on its evolution since its establishment in 1937. Founded originally to reduce reliance on the Indian rupee, the bank has transformed from manual ledgers to full-scale digital banking services. CEO Tilak Raj Pandey noted the bank’s strong performance, including last fiscal year’s net profit of Rs 3.77 billion. NBL now operates 231 branches in 71 districts, managing deposits of Rs 342 billion and loans worth Rs 236 billion.
Himalayan Reinsurance posts 8.6% rise in first-quarter profit
Himalayan Reinsurance recorded a net profit of Rs 245.8 million in the first quarter of the current fiscal year, marking an 8.6% increase from Rs 226.3 million in the same period last year. The improvement was driven mainly by a 9.3% expansion in net premium income, which reached Rs 1.1 billion. Investment income, however, dropped to Rs 233.9 million from last year’s Rs 312.1 million. Despite the decline, the company’s annualized earnings per share (EPS) improved from Rs 8.71 to Rs 9.05.
Govt weighs fertilizer price hike amid global cost surge
The Ministry of Agriculture and Livestock Development (MoALD) is preparing to revise chemical fertilizer prices in response to rising global costs. Ministry Secretary Dr. Govinda Sharma informed Finance Minister Rameshore Khanal that the current fiscal allocation of Rs 28.82 billion to purchase 600,000 metric tons has already been depleted after procuring just 471,000 metric tons. International prices of urea, DAP, and potash have jumped 20%–25% over the past year, requiring additional budget management for another 146,000 metric tons.
Shangrila Development Bank announces 10.3583% dividend
The board of Shangrila Development Bank has proposed a total dividend of 10.3583% for shareholders, comprising a 5% bonus share and a 5.3583% cash payout (including tax). The total dividend amount stands at Rs 368.3 million. Distribution of the dividend is subject to approval from the Nepal Rastra Bank and the bank’s upcoming annual general meeting.
Department of Roads moves to cancel 229 stalled contracts
The Department of Roads (DoR) is preparing to terminate 229 dormant road and bridge contracts labeled as “sick,” some dating as far back as 2011. Public notices have been issued, giving contractors 15 days to justify the lack of progress. Kathmandu Road Division has the most sick projects at 57, followed by Tumlingtar with 17 and Doti with 15. Similarly, the Department of Urban Development is terminating 37 out of 42 non-performing building and road contracts. The DoR plans to blacklist contractors and seize bank guarantees where responses remain inadequate.
Land use regulation amended to introduce land bank, minimum plot size
The government has enforced the Land Use (Third Amendment) Regulation, 2025, revising the 2022 regulation. A key feature is the introduction of a “land bank” system to bring long-unused or barren land back into productive use under local-level committees. To prevent haphazard land fragmentation, the amendment sets a minimum plot size of 130 sq. meters (about 4 aana) for residential and commercial subdivision, although exceptions may apply. Land required for infrastructure projects—such as transmission line corridors—can still be divided with proper compensation.
Consumer inflation drops to 1.47% in mid-October
Nepal Rastra Bank’s latest figures show year-on-year consumer price inflation easing to 1.47% in mid-October, down sharply from 4.82% in the same period last year. Average inflation for the first quarter of FY 2025/26 stands at 1.67%, well below last year’s 4.26% and within the central bank’s 5% target. Ghee and oil posted the highest price rise at 7.75%, while vegetables fell 15.67%, spices 7.82%, and pulses 4.41%.
Copper exploration resumes in Dhaulagiri’s Machhim area
M/S Dongyi Minerals Pvt. Ltd. has started exploration work at an old copper mine site in Dhaulagiri Rural Municipality-7, which has remained inactive since 1971. A team of geologists is assessing mineral concentrations and reviewing access road requirements. Local residents—particularly the Chhantyal community, historically associated with mining—have welcomed the initiative but stressed the importance of environmental safeguards and priority for local employment.
Nepal Telecom waives penalties on overdue bills
Nepal Telecom has announced a complete waiver of penalties for customers who settle outstanding dues from FY 2022/23 and earlier.
Payments must be cleared by February 12, 2026, to qualify. The company encouraged customers to visit nearby offices to take advantage of the offer; after the deadline, unpaid accounts will be publicly listed and blacklisted on its website.
Gharchhong Ring Road reaches 93% completion after long delays
Construction of the 10.5-kilometer Gharchhong Ring Road in Gharphajhong Rural Municipality, Mustang, has reached 93% physical progress—six years after the contract was signed in July 2019. Implemented under Gandaki Province’s ‘One Constituency, One Road’ program, the project has faced repeated delays after the contractor, Bandana Bhagawati Construction Service, received seven deadline extensions due to COVID-19 and harsh weather. Once complete, the road will greatly ease the transport of apples and agricultural goods for local farmers. Financial progress stands at 88% of the Rs 244.5 million total cost.
Beekeeping in Dang generates Rs 1.6 million annual turnover
Commercial beekeeping continues to expand in Dang due to favorable climatic conditions, with more than 500 farmers now engaged in the sector. Operations maintaining around 150 hives report annual turnovers of about Rs 1.6 million, saving roughly Rs 700,000 from sales of seven metric tons of honey. Other enterprises managing around 100 hives yield roughly 35 quintals of honey annually, with some also producing beekeeping equipment. Established operators report monthly earnings exceeding Rs 100,000 from approximately 105 hives.
Dolpa–Jumla road upgrade begins with Rs 259.9 million allocation
Work has commenced to upgrade the Tripurakot–Maure road connecting Dolpa’s Tripurakot Municipality to Maure in Jumla. The project is funded with more than Rs 259.9 million. According to Minister for Physical Infrastructure and Urban Development Sher Bahadur Budha, the 68-km road is part of a multi-year plan linking Tripurakot, Chhal, Kaigaun, Maure Lek, and Jumla to Mugu’s Rara Lake.
The project is expected to strengthen tourism by providing a land route between the Rara and Shey-Phoksundo lake regions. The contractor has two years to complete the upgrade.
Comment