KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s recent economic indicators reflect a complex interplay of stability efforts, investment activity, and sectoral shifts. The NEPSE index dipped marginally despite stable trading volumes, while the central bank aggressively managed liquidity—both by withdrawing Rs 50 billion from the market and easing loan restructuring for private businesses.
Meanwhile, foreign direct investment commitments reached Rs 60.6 billion over 11 months, indicating continued investor interest, including proposals like Korea’s green hydrogen project. Inflationary pressures remain uneven, with rising egg prices due to heat-induced production drops contrasted by falling cement, steel, and gold prices.
Structural reforms are underway, from a draft aviation policy and wage protections for UAE-bound workers to expanded fish farming. However, challenges persist, including rising non-performing loans—41% of which are mid-sized—and delayed budget processes in Kathmandu, pointing to ongoing governance and fiscal management issues.
NEPSE dips slightly by 0.33 points, closes at 2600.20
The Nepal Stock Exchange (NEPSE) index shrank by 0.33 points on Wednesday, ending the session at 2,600.20. Despite the minor dip, trading activity remained persistent, with turnover climbing slightly to Rs 5.94 billion, compared to Tuesday’s Rs 5.76 billion.
Gold price drops by Rs 1,500 per tola
Gold prices in Nepal declined on Wednesday, with hallmark gold priced at Rs 192,000 per tola—down Rs 1,500 from Tuesday’s Rs 193,500. According to the Federation of Nepal Gold and Silver Dealers’ Association, silver remained steady at Rs 2,140 per tola.
Nepal receives Rs 60.6 billion in FDI commitments over 11 months
Foreign direct investment (FDI) commitments totaled Rs 60.6 billion in the first eleven months of the current fiscal year. According to Industry Department spokesperson Arjunsen Oli, Rs 3.86 billion came via the automatic route, while Rs 56.74 billion arrived through the approval route.
NRB withdraws Rs 50 billion from market again
To combat excess liquidity, NRB has withdrawn Rs 50 billion from the market via a 63 day deposit tool. This move, part of a regular liquidity management strategy, aims to mop up surplus funds deposited by banks and financial institutions.
Investment companies barred from secondary market share purchases
The Securities Board of Nepal (SEBON) has tightened regulations on investment companies. Entities formed to raise public funds for specific sectors are now forbidden from purchasing shares on the secondary market. SEBON plans to enact this change through stricter amendments and broadened investment guidelines.
Banks increase deposits in NRB amid liquidity crunch
Facing a persistent liquidity shortage, Nepali banks and financial institutions have increased deposits at the Nepal Rastra Bank. With standard 21 day deposits offering only 2.99% interest, NRB has introduced new 42 and 63 day deposit instruments to encourage banks to park surplus funds.
NRB Governor Paudel relaxes loan repayment and restructuring rules
Nepal Rastra Bank (NRB) Governor Biswo Paudel has introduced more flexible lending policies for the private sector. Borrowers of working capital loans are granted longer repayment periods, while small and medium enterprises can now restructure loans up to Rs 20 million. Additionally, extended deadlines have been allowed for priority-sector credit.
Govt drafts new aviation policy 2025 to replace 19-year-old one
The Ministry of Culture, Tourism, and Civil Aviation has released the National Aviation Policy 2025 draft, aiming to replace the outdated 2006 framework. The new policy expands private sector participation by allowing individuals and institutions to operate air services.
Deadline extended for sectoral lending by banks
NRB has extended the deadline for banks and financial institutions to meet sectoral lending targets. Under an amended Unified Directive 2024, lenders now have an additional year to allocate at least 15% of their total loans to agriculture and small- to medium-scale industries.
Ex-finance minister Mahat warns against current bilateral loan practices
Former Finance Minister Dr Prakash Sharan Mahat criticized Nepal’s current practice of securing bilateral loans, describing it as unhelpful to the country. Speaking in Kathmandu, he stated, “The way we are taking bilateral loans, it’s not helping us.”
Govt sets AED 1,000 minimum wage for Nepali workers in UAE
Nepal’s Ministry of Labour, Employment, and Social Security has mandated a minimum wage of AED 1,000 for workers migrating to the UAE. Recruiting agencies are now prohibited from sending workers below this threshold, and any contract or demand letter offering less will be rejected by the embassy.
Petroleum imports generate highest revenue at Birgunj customs
In the first eleven months of fiscal year 2024/25, Birgunj Customs collected Rs 73.18 billion in revenue from petroleum product imports, accounting for 46.43% of the top 20 import categories. The office reported a total import expenditure of Rs 174.09 billion across five petroleum products.
Bangladesh power import from Upper Karnali in limbo
Bangladesh’s plan to import 500 MW from Nepal’s Upper Karnali Hydropower Project is uncertain after the government suspended agreements under the Special Power Act. Bangladeshi media report that the contract with India’s GMR may be canceled as a result.
Kathmandu misses budget deadline, unlike other metros
Five out of six metropolitan cities in Nepal submitted their budgets for FY 2025/26 on the scheduled date of June 24—but Kathmandu Metropolitan City failed to do so. The Budget Formulation and Program Committee informally convened Tuesday night and called on Mayor Balen Shah to prioritize timely budget presentation.
41% of NPLs fall between Rs 10–100 million
Data supporting Nepal Rastra Bank Governor Biswo Paudel’s statement shows that 41% of the country’s non-performing loans (NPLs) are in the Rs 10 million to Rs 100 million range. By mid-April 2025, commercial banks had issued a total of Rs 4.911 trillion in loans, with loans between Rs 10–100 million accounting for 21.1%. Total NPLs stood at Rs 248 billion, or 5.05% of total lending.
No urea shortage this year, say suppliers
Officials from Agriculture Inputs Company Limited and Salt Trading Corporation in Madhesh Province confirm that there will be no urea shortage this year. Consistent shipments through the Birgunj border have ensured stable chemical fertilizer supplies for paddy cultivation.
Korean company proposes green hydrogen and fuel cell project
South Korea-based GPhilos Ltd. has submitted an investment proposal to Nepal’s Investment Board to establish a green hydrogen production plant and a fuel cell facility. Board spokesperson Pradyumna Prasad Upadhyaya said the pilot project aims to generate 20 megawatts of green hydrogen power and introduce fuel cell technology in Nepal.
FNCCI President invites South African investment in tourism
FNCCI President Chandra Prasad Dhakal met with South African Ambassador to Nepal and High Commissioner to India Prof. Anil Sooklal on Tuesday. Dhakal urged stronger bilateral investment ties, especially in Nepal’s tourism infrastructure sector, highlighting untapped opportunities.
Cement and steel prices fall in domestic market
Cement and steel rod prices have dropped in Nepal. According to the Department of Commerce, Supplies and Consumer Protection, cement prices are down by over Rs 50 per sack and steel by up to Rs 5 per kilogram. The department’s director general, Kumar Prasad Dahal, attributed the price drop to reduced factory load-shedding and stronger market demand.
Egg prices spike as heatwave reduces supply
Rising summer temperatures have led to a 25% drop in egg production, pushing up prices. Reduced feed intake among chickens and increased mortality due to heat stress have contributed to the shortage, while demand has surged following school and campus reopenings.
Palpa women farmers turn ginger into global export
In Galda, Nisdi-5, Palpa, a group of women farmers have made commercial success from ginger farming. Since forming the Galda Social Entrepreneur Women’s Cooperative in 2016, the farmers now process and export ginger to Europe. Exports have risen from 805 kg in 2021 to 14,560 kg so far this year, with prices ranging from Rs 350 to Rs 750 per kg over the years.
Government launches high-breed fish farming program
To curb fish imports, the government has launched a new initiative to breed high-quality fish varieties domestically. The Central Fish Promotion and Conservation Centre in Balaju has imported 4,000 Pangasius fingerlings—a fast-growing, consumer-preferred species—which will be raised and distributed nationwide.
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