KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape is showing mixed signals amid fiscal and policy developments. While the NEPSE index recorded modest gains despite declining turnover, the subdued growth in private sector lending—falling short of monetary targets—highlights persisting sluggishness in investment sentiment.
Inflationary pressure is mounting ahead of major festivals, straining household budgets even as the government rolls out support mechanisms. Meanwhile, gold prices have surged, reflecting global trends and rising local demand. Nepal Rastra Bank is tightening compliance by banning demonetized Indian notes and pushing for currency and bond market reforms.
Infrastructure and trade sectors are also active: a new tunnel project nears completion, private firms are set to join the power trade, and the government seeks commercial gas exploration in Dailekh. However, challenges remain, including regulatory burdens like the controversial embossed number plate system, unresolved social allowance distributions, and rising debt at Nepal Airlines. These developments indicate a dynamic yet strained economy balancing reform, inflation, and political complexities.
NEPSE climbs 4.83 points as turnover declines
The NEPSE index increased by 4.83 points on Tuesday, closing at 2,766.09 after briefly hitting 2,775 in early trading. Despite the gain, daily trading volume dropped significantly to Rs 4.18 billion from Rs 5.75 billion the previous day. A total of 101 companies saw price increases, 149 fell, and one remained unchanged. While most sector indices rose slightly—led by the ‘Others’ group (+1.42%)—the Manufacturing (-0.68%) and Microfinance (-0.48%) sectors declined.
Gold price rises by Rs 1,500 per tola
On Tuesday, the price of gold surged by Rs 1,500, reaching Rs 198,700 per tola, up from Rs 197,200 the previous day, according to the Federation of Nepal Gold and Silver Dealers’ Association. Silver also continued its upward trend, increasing by Rs 5 to reach Rs 2,360 per tola.
Central bank warns against using demonetized Indian notes
Nepal Rastra Bank has reiterated that old Indian Rs 500 and Rs 1,000 notes—demonetized by India in 2016—remain illegal to use, possess, or transport in Nepal. The ban also includes carrying such notes while traveling to or from any country other than India.
NRB seeks tenders to print 430 million Rs 1,000 banknotes
Nepal Rastra Bank has announced a tender to print 430 million Rs 1,000 denomination notes, including their design, production, and delivery. Only the six companies that qualified during the pre-qualification round in February 2081 BS are eligible to submit bids.
Government to raise Rs 10 billion through bonds
The government is preparing to issue a new three-year development bond—titled “Development Bond 2028–D”—to raise Rs 10 billion in internal loans. These bonds are typically used for medium- to long-term borrowing with maturities ranging from 3 to 15 years.
Lock-in period nearing end for six companies’ shares
Shares of six companies, currently held by promoters, mutual funds, and local investors, will soon be tradable as their lock-in period ends within a month. NEPSE has notified that once these shares enter the market, the increase in supply could exert downward pressure on share prices.
Festive inflation puts pressure on household budgets
With major festivals like Dashain, Tihar, and Chhath approaching, rising inflation is making it harder for households to manage expenses. The government has stepped up efforts to ease the burden, going beyond its traditional fair-price shop programs.
Private sector lending misses target
In fiscal year 2024/25, banks and financial institutions increased lending to the private sector by 8.4%, achieving just 67.2% of the 12.5% growth target set in the monetary policy. This marks a slight improvement compared to the 5.8% growth in the previous year.
Private sector to be included in electricity trade
Energy Minister Deepak Khadka has announced that private companies will be given more access to electricity trading—both domestically and internationally. The decision follows recommendations from a study committee led by former secretary Dinesh Kumar Ghimire.
Nagdhunga–Sisnekhola tunnel expected to open in 2026
The Nagdhunga–Sisnekhola tunnel is on track for operation in 2026. Project chief Saujanya Nepal said only hillside reinforcement work remains near the Sisnekhola entrance. Trial runs and equipment testing are expected before the New Year.
Milk consumption spikes on Teej’s Dar day
Milk sales soared nationwide on the eve of Teej, with consumption reaching 2.6 million liters—more than double the daily average of 1.1 to 1.2 million liters. Dairy shops and industries reported high demand as families prepared traditional dishes like kheer.
Banks allocate over Rs 11 billion in bonuses
Banks and financial institutions have set aside Rs 11.756 billion for employee bonuses in FY 2024/25, reflecting improved profitability. This marks a rise from the previous fiscal year’s Rs 9.197 billion, with bonuses required by law to account for 10% of annual profits.
Nepal Airlines’ debt climbs to Rs 42 billion
Nepal Airlines Corporation’s debt burden has ballooned to Rs 42 billion due to stagnant revenue growth. The Rs 24 billion loan taken in 2017 for wide-body aircraft purchases and an earlier Rs 10 billion loan from the Employees Provident Fund remain unpaid, with interest continuing to accumulate.
No declaration needed for carrying up to $5,000
Nepal Rastra Bank has clarified that travelers entering Nepal can carry up to $5,000—or an equivalent amount in Indian rupees—without needing to file a customs declaration. The clarification comes amid complaints from Indian visitors facing currency issues at border points.
Transport federation urges halt to embossed number plates
The National Federation of Public Transport Nepal has called for the suspension of the embossed number plate system. General Secretary Bharat Nepal stated that the initiative imposes unnecessary financial burdens on both the public and transport operators, especially as it uses foreign technology without proper infrastructure in place. The federation emphasized it would not accept the current implementation without changes to provisions it deems impractical.
Unused trademarks to be canceled after one year
The Department of Industry has introduced a new rule requiring trademark owners to prove usage within a year of registration or risk cancellation. Information officer Pashupati Babu Puri explained that the policy aims to discourage the growing trend of registering trademarks without engaging in actual business.
Paddy plantation area declines compared to last year
Paddy plantation for this year has concluded, with a total of 1,306,293 hectares planted—70,173 hectares less than last year. According to the Center for Crop Development and Agro-Biodiversity Conservation, last year’s total stood at 1,376,466 hectares.
Bank switch causes issues for social security recipients in Diktel
Residents of Diktel Rupakot Majhuwagadhi Municipality have faced delays in receiving social security allowances following a change in the distributing bank. While Sanima Development Bank has ceased operations in five wards, agreements with Nabil Bank and NIC Asia Bank have yet to be formalized, disrupting payments in wards 8 and 11, the municipality reported.
Committee formed to explore commercial use of Dailekh natural gas
The government has created a four-member technical committee to study the commercial potential of natural gas deposits in Dailekh. Led by Nepal Oil Corporation director Binit Mani Upadhyaya, the team was appointed by the Ministry of Industry, Commerce, and Supplies to conduct a feasibility study and make necessary preparations.
Lumbini province cabinet takes 12 key decisions
The Lumbini Province cabinet, chaired by Chief Minister Chet Narayan Acharya, made 12 decisions during its Monday meeting. Key among them was a recommendation to the federal government to release private land in Rapti Rural Municipality, Gaidahawa Rural Municipality, and Shitganga Municipality of Arghakhanchi, based on local demands and reports from the Infrastructure Development Authority.
Comment