KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic indicators this week reflect a mix of caution and progress. The NEPSE index fell by 27.14 points, signaling investor unease despite a strong turnover, with NRIC leading the activity.
Simultaneously, most commercial banks have slashed fixed deposit interest rates, reflecting a possible excess in liquidity or limited lending appetite. On the fiscal front, the government’s revenue collection in the first month of FY 2025/26 outpaced expenditure, indicating a cautious spending approach, although collections remain modest relative to annual targets.
In commodities, gold and silver prices continued to decline, extending a multi-day downtrend amid shifting market sentiments. Meanwhile, infrastructure development made headway with the Naubise-Nagdhunga tunnel nearing completion, and the energy sector showed momentum as Phedikhola Hydropower announced a Rs 175 million IPO.
Agriculture also offered a positive note, with squash farmers earning significant daily income due to high demand, and paddy plantation reaching 75% completion in Mahottari following favorable rains—highlighting resilience and progress in rural economies.
NEPSE index drops 27.14 points to 2,761.22
The Nepal Stock Exchange (NEPSE) saw a notable decline today, falling by 27.14 points (0.97%) to close at 2,761.22, following a modest gain of 2.62 points in the previous trading session. The index opened at 2,789.85, reached an intraday high of 2,803.25, and touched a low of 2,761.22 before closing. Total market turnover stood at Rs. 7.73 billion, with 20.5 million shares traded across 317 listed companies through 86,669 transactions. Nepal Reinsurance Company Limited (NRIC) emerged as the top performer in terms of turnover, contributing Rs. 51.67 crores, with its stock closing at Rs. 1,575.00. The day’s total market capitalization was recorded at Rs. 4.61 trillion, while the float market cap stood at Rs. 1.56 trillion.
Banks revise fixed deposit rates
Commercial banks have published their fixed deposit (FD) interest rates for the month of Bhadra (August 17-Sep 16). Of the 20 banks, 11 maintained the same rates as in the Nepali month of Shrawan, while nine made revisions. Among those, eight banks reduced their rates and only one opted for an increase. Standard Chartered Bank Limited (SCB) made the largest cut in institutional FD rates, slashing them by 1.13 percentage points—from 6.26% in Shrawan to 5.13% in Bhadra. Siddhartha Bank Limited (SBL) also reduced its institutional FD rate by 0.75 percentage points, bringing it down from 4.75% to 4%. In contrast, Prabhu Bank Limited (PRVU) was the only bank to hike rates, raising its institutional FD rate by 1.10 percentage points—from 4.25% in Shrawan to 5.35% in Bhadra.
Govt collects Rs 85.19 billion, spends Rs 46.30 billion in first month of FY 2025/26
In the first month of the fiscal year 2025/26, the government collected Rs 85.19 billion in revenue while spending Rs 46.30 billion, according to data from the Financial Comptroller General Office. This represents 5.56 percent of the total revenue target and 2.36 percent of the annual expenditure goal. The government has set a revenue target of Rs 1.533 trillion for the fiscal year. Of the total, Rs 80.67 billion came from tax revenue—6.09 percent of the yearly target—while Rs 3.79 billion was generated from non-tax sources, amounting to 2.46 percent of that goal. Additionally, the government received Rs 420 million in foreign grants and Rs 309 million under other categories. The overall targets for the fiscal year include Rs 1.325 trillion in tax revenue, Rs 154.41 billion in non-tax revenue, and Rs 53.44 billion in foreign grants.
Gold price drops further, silver also down
The price of gold continued its decline on Sunday, falling by Rs 700 per tola. On Friday, gold had already dropped by Rs 600 per tola. According to the Federation of Nepal Gold and Silver Dealers, the price of fine gold now stands at Rs 195,500 per tola. On Friday, it was Rs 196,200 per tola. Gold had been on a five-day losing streak last week before recording a slight rise on Thursday. The price of silver has also edged down by Rs 5, trading at Rs 2,310 per tola, the Federation said.
Naubise-Nagdhunga tunnel nearing completion: PM Oli
Prime Minister (PM) KP Sharma Oli has said that the construction of the Naubise-Nagdhunga tunnel is close to completion. Sharing the update on social media today, he noted that the project has achieved 93 percent physical progress and is expected to come into operation soon, easing travel for the public. Earlier, on August 11, the Council of Ministers fixed vehicle charges for using the 2.688-kilometer tunnel once it opens. The toll has been set at Rs 65 for cars and vans entering Kathmandu and Rs 60 when exiting.
For minibuses and small trucks, the charge will be Rs 115 inbound and Rs 80 outbound; for buses and medium trucks, Rs 260 inbound and Rs 200 outbound; and for heavy vehicles, Rs 600 inbound and Rs 200 outbound.
Phedikhola Hydropower to float Rs 175 million IPO
Phedikhola Hydropower Company Ltd has announced plans to issue an Initial Public Offering (IPO) worth Rs 175 million to the public. This decision follows a general meeting held on Friday, where the company approved increasing its authorized capital to Rs 700 million. Of this, 25 percent will be offered to the public through the IPO. The board of directors has been granted the authority to move forward with the process. The company is currently developing a 4.3 MW hydropower project in Salpasilichho, Bhojpur, with completion targeted by the end of Poush 2082. The total project cost is estimated at Rs 980 million, funded through 49 percent equity (Rs 480 million) and 51 percent debt (Rs 500 million) secured from Rastriya Banijya Bank.
Farmers earning over Rs 10,000 daily from squash sales
With the price of green vegetables soaring in the district headquarters of Gaighat, squash grown in the hilly areas of Rauta, Saune, Khambu, Rautamalbase, Salle, and surrounding regions is now generating daily sales of over Rs 10,000. According to Tanka Bahadur Magar, a squash farmer from Khambu, sales to the Gaighat market began in the third week of August. Another farmer from Khambu, Devraj Khatri, said that traders from Gaighat, Deuri, Bagaha, and Siraha are now purchasing squash directly from the farms. As a result, daily sales have reached Rs 10,000 to Rs 20,000.
Around 75 percent paddy plantation completed in Mahottari
Favorable rainfall in the second week of August significantly accelerated paddy plantation in Mahottari, with about 75 percent of farmland planted by the end of the month, according to the Agricultural Knowledge Center, Mahottari. While plantation had reached only 30 percent by the last week of July, it rose to 45 percent by the first week of August and reached approximately 75 percent by the second week. The improvement is attributed to consistent rainfall and increased use of underground water resources. “The rainfall in the second weke of August provided crucial support,” said Abiral Kumar Mahato, the center’s information officer and a crop expert. “Farmers also made extensive use of deep borings, wells, and tubewells, which helped speed up plantation efforts.”
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