KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic and financial landscape is currently marked by a mix of volatility, policy adjustments, and emerging trade opportunities. A record surge in gold prices reflects global market uncertainty, while commercial banks continue to lower deposit rates, indicating ample liquidity or reduced credit demand.
Simultaneously, regulatory efforts such as mandating licensed brokers for high-value real estate transactions and canceling dormant infrastructure contracts signal government intent to tighten oversight and improve efficiency. However, systemic delays—like insurance payouts for Gen Z-related damages and stalled hydropower projects—highlight persistent bureaucratic bottlenecks.
On a positive note, trade via the Korala border has resumed with strong EV imports, flower exports have doubled, and banks like Standard Chartered and Himalayan Distillery are rewarding shareholders. Yet challenges remain, including minimal funds raised for infrastructure reconstruction, significant agricultural losses from floods, and failure by 43 local governments to submit their budgets on time, reflecting ongoing administrative and fiscal weaknesses.
Gold price jumps by Rs 7,100, sets new record at Rs 258,000 per tola
Gold prices in Nepal surged by Rs 7,100 per tola on Friday, reaching an all-time high of Rs 258,000. The previous day’s rate for hallmark gold was Rs 250,900 per tola, marking one of the steepest single-day increases recently. Silver prices also rose, climbing to Rs 3,350 per tola from Rs 3,275.
Industries begin settling unpaid premium electricity charges
Several industries using dedicated and trunk power lines have resumed payments of overdue premium electricity charges to the Nepal Electricity Authority. Among them, Samrat Cement, Rolpa Cement, and New Nepal Plastic Industries have recently made payments. These companies had previously used installment options to pay but had stopped making payments since May after partial settlement.
Finance Minister calls for simpler ADB project guidelines
Finance Minister Rameshore Khanal has urged the Asian Development Bank to simplify its project implementation procedures. He made the request during a meeting with ADB President Masato Kanda in Washington, D.C., while attending the World Bank and IMF annual meetings. Khanal acknowledged ADB’s vital role in supporting infrastructure development in Nepal.
Commercial bank deposit rates continue downward trend from mid-October to mid-November
Commercial banks have further reduced their deposit interest rates between mid-October and mid-November. The average maximum interest rate for individual fixed deposits dropped by 0.263 percentage points—from 5.4635% in the previous period (mid-September to mid-October) to 5.2005% in the current one. Despite the drop, Global IME Bank and Himalayan Bank are still offering the highest rate at 6%. Out of 20 commercial banks, 14 lowered their rates while six left them unchanged.
Nepal Reinsurance delays insurance payouts linked to Gen Z movement
Insurance claims for property damage caused by fires and vandalism during the Gen Z movement have been delayed due to Nepal Reinsurance Company. The company has been slow in issuing advance payments, affecting insured individuals and businesses. The interim government had approved advance payouts of up to 50% for affected properties, but delays have hindered timely compensation.
Industry ministry unveils five-month action plan
Industry, Commerce and Supplies Minister Anil Kumar Sinha has released a five-month work plan, outlining 39 actions. This marks the first time such a detailed plan has been disclosed under this ministry during the interim government. The strategy distinguishes among the ministry’s three operational sectors.
Only Rs 60 million collected for infrastructure rebuilding fund
Just Rs 60.07 million has been raised for the Physical Infrastructure Reconstruction Fund, set up to repair government structures damaged during the Gen Z protests. The fund was created by the government on September 24, but collections so far have fallen short of expectations. The Ministry of Finance confirmed the current total.
Hydropower projects stalled amid government inaction
Two hydropower projects have been on hold for three months due to delays by government authorities. The Supreme Court had instructed the Ministry of Forests and Environment to develop regulations for hydropower development in protected areas. Although the ministry directed the National Parks Department to prepare these guidelines, no progress has been made. As a result, construction work on the Tamakoshi-5 and the 20 MW Rolwaling Diversion project under Upper Tamakoshi Hydropower remains suspended.
High-value real estate deals restricted to licensed brokers
The government has mandated that real estate transactions exceeding Rs 30 million be conducted only through licensed brokers. A gazette notification has been issued to prevent unregulated high-value property sales or purchases. Companies must now obtain official approval to engage in such transactions.
Government begins process to cancel 17 inactive road and bridge contracts
Authorities have started terminating 17 long-inactive road and bridge contracts. These projects had been awarded but remained unfinished for years. The cancellations are being handled by the Postal Road Directorate, Federal Road Supervision and Monitoring Office (Kathmandu), and various road division offices, including Itahari. A public notice issued Friday questioned the inaction on these contracts—five each in Biratnagar, Chandranigahpur, and the Directorate, and two in Nuwakot.
Korala border trade gradually resuming
Trade through the Korala checkpoint with China has slowly restarted since Bhadra 30. In the past month, Nepal imported 1,273 electric vehicles—jeeps, cars, and vans—along with vehicle parts, machinery, and other goods. Customs collected Rs 2.39 billion in revenue from these imports. The early surge in electric vehicle imports suggests Korala’s potential as a key trade route.
Over Rs 3.26 billion in flood and landslide claims filed
Following the heavy rains and flooding on October 4, insurance claims totaling more than Rs 326.76 million have been submitted. According to the Insurance Authority, 364 property insurance claims related to flood and landslide damage were reported as of October 16.
Flower exports double in fiscal year 2024/25
Nepal’s flower exports rose significantly in fiscal year 2024/25, reaching Rs 21.36 million, up from Rs 10.02 million the previous year, according to the Customs Department. Domestically grown flowers are exported to countries such as Japan, Hong Kong, the United States, Australia, Qatar, Canada, and the UAE. In support of local producers, Kathmandu Metropolitan City has banned the import of foreign flowers this year.
Over Rs 268 million in decorative lights imported in just two months
In the first two months of this fiscal year, Nepal imported decorative lights worth Rs 268.79 million, featuring 26,879 different designs and colors. However, due to the closure of the Rasuwa and Tatopani border points with China since early June, many shipments remain stuck. Authorities estimate that imports could have reached Rs 400 million if the borders had remained open.
Floods cause over Rs 1 billion in agricultural losses in Mahottari
Continuous rainfall and flooding in Mahottari have resulted in agricultural damage exceeding Rs 1 billion. The Agriculture Knowledge Center reports that crops such as rice, sugarcane, vegetables, fruits, legumes, and nursery plants were severely affected. Around 1,225 hectares of farmland across 14 local units were destroyed, wiping out roughly 57,527 metric tons of crops worth Rs 96.58 million.
43 local governments still haven’t submitted budgets
Three months into the current fiscal year, 43 local governments have yet to present their annual budgets. As per the constitutional requirement, local budgets must be submitted by June 24 each year. While the federal government unveils its budget on Republic Day, provincial governments do so on June 15.
Himalayan Bank to suspend services from October 20–27
Himalayan Bank will temporarily halt all banking services from October 20 to 27 as it upgrades its core banking system to T-24 Release R-23. All services will be unavailable during this period due to the system transition.
Standard Chartered announces 19% cash dividend
Standard Chartered Bank has declared a 19% cash dividend for its shareholders based on profits from the previous fiscal year. The decision was made during the board of directors’ meeting on October 17 and includes taxes.
Arambha Chautari and Prabhu Bank sign employee benefit deal
Arambha Chautari Microfinance and Prabhu Bank have entered into an agreement to provide banking benefits for Arambha Chautari employees. The deal was signed by Arambha CEO Shiva Prasad Gyawali and Prabhu Bank’s Central Business Center Head Lekh Bahadur Pun.
Sanima Bank launches festive cashback and discount offers
Sanima Bank has rolled out cashback and discount offers for Tihar and Chhath festivals. Customers using Sanima Bank debit or credit cards to buy sweets at partner stores will get 10% cashback (up to Rs 200) along with an extra 10% discount.
Himalayan Distillery declares 25% dividend for shareholders
Himalayan Distillery has announced a 25% dividend for its shareholders—comprising a 5% cash dividend (including tax) and 20% in bonus shares. The company will hold its annual general meeting on November 16 at its registered office in Parsa, with the book closure date set for November 6.
Comment