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, reflecting both policy-driven interventions and structural challenges. The sharp fall in the NEPSE index, combined with reduced trading volume, points to declining investor confidence, possibly influenced by regulatory uncertainty and NRB’s liquidity absorption measures aimed at stabilizing interest rates amid excess deposits.
Meanwhile, rising gold prices, upcoming IPOs, and continued FDI inflows—such as the Rs 20 billion meat processing plant—indicate pockets of optimism. However, challenges persist: telecom companies are incurring heavy losses due to free Wi-Fi access, fuel prices are expected to rise with increased transport tariffs, and new export restrictions from India have stalled Nepal’s steel utensil trade.
Additionally, infrastructure projects are progressing slowly, and several insurers failed to meet capital requirements. While the government met its domestic borrowing target, it struggled to secure external funds, highlighting a growing reliance on internal resources. Overall, Nepal’s economy remains in a delicate balancing act between growth opportunities and systemic vulnerabilities.
NEPSE sees sharp decline, drops by 52.87 points
The Nepal Stock Exchange (NEPSE) experienced a significant downturn on Wednesday, the fourth trading day of the week, falling by 52.87 points to settle at 2,949.19. This follows a 30.76-point rise on Tuesday that had lifted the index to 3,002.07. On Monday, the index had gained 7.10 points, while last Wednesday saw a decline of 18.44 points. Before that, NEPSE had posted gains for eight straight trading sessions. Trading volume also declined on Wednesday, amounting to Rs 16.44 billion—down from Tuesday’s Rs 18.24 billion.
Nepal Rastra Bank absorbs Rs 25 billion in excess liquidity
In an effort to manage surplus liquidity in the banking sector, NRB withdrew Rs 25 billion on Wednesday using a deposit collection auction for a 42-day period. With total banking deposits now exceeding Rs 7.2 trillion, the central bank is actively using tools like deposit auctions and the standing deposit facility to help stabilize interest rates.
Gold price increases by Rs 1,400 per tola
The price of gold rose by Rs 1,400 per tola on Wednesday, reaching Rs 194,400, according to the Federation of Nepal Gold and Silver Dealers Association. On Tuesday, the price stood at Rs 193,000. A week earlier, on Shrawan 7, gold prices had peaked at Rs 197,600 per tola. Meanwhile, silver prices rose by Rs 10 per tola.
Govt meets full domestic borrowing goal, external debt lags at 58%
In fiscal year 2081/82 (2024/25), the government achieved its entire domestic borrowing target of Rs 330 billion, according to the Public Debt Management Office. However, only 57.79% of the Rs 217 billion targeted for external debt was raised, amounting to Rs 125.39 billion—falling short by roughly Rs 9.16 billion.
Bank CEOs respond calmly to NRB’s rule on separating investors and business owners
Chief Executive Officers of several banks expressed a measured stance toward the Nepal Rastra Bank’s (NRB) proposal to separate banking investors from active businesspersons. During a discussion organized by NRB on Tuesday, most participants voiced general support for the provision, while some stressed that business-affiliated investors should be given sufficient time and assistance to comply.
Fuel price likely to rise as transport tariff increases
The Nepal Oil Corporation (NOC) has approved a hike in transportation tariffs for fuel tankers, which is expected to increase retail fuel prices. In a decision made last Friday, the NOC board agreed to raise transport charges by 4.75% to 5.90%. These added costs, influenced by tanker operators and NOC management, will be reflected in consumer prices.
CDSC’s decision affects Rs 87 billion worth of shares across 58 companies
A new move by CDS and Clearing Limited (CDSC) concerning dematerialized share registration is expected to impact Rs 87 billion worth of shares from 58 companies in sectors like energy, media, and cement, according to IPPAN. Of this total, 47 energy firms with shares valued at Rs 53 billion and 37 companies awaiting approval to issue Rs 41 billion in shares are projected to be affected.
Seven insurers fail to meet capital requirement deadline
Seven insurance companies have not met the mandatory paid-up capital requirement, despite the deadline having passed last Poush. According to the Insurance Board, this includes two life insurers and five non-life insurers. Life insurance companies were expected to maintain at least Rs 5 billion in paid-up capital, while non-life insurers needed Rs 2.5 billion.
Social Security Fund needs more clarity and awareness, stakeholders say
Stakeholders have called for a more scientific and transparent approach to the Social Security Fund (SSF), emphasizing its benefits not just for workers but also for business owners. Speaking at an orientation organized by the Butwal Chamber of Commerce and SSF’s Butwal branch, participants highlighted the need to boost public understanding of the fund.
Rs 20 billion foreign investment approved for meat processing plant in Sindhuli
A foreign direct investment of Rs 20 billion has been approved for a processed buffalo meat factory under construction in Sindhuli. The project, in collaboration with China’s Chengdu Jian Food Company Limited, marks the largest single-project investment of its kind in Nepal. Approval was recently granted by the Department of Industry.
Progress slow on Sunkoshi-Marin diversion project despite tunnel breakthrough
Though the Sunkoshi-Marin Multipurpose Diversion Project achieved a major milestone with a tunnel breakthrough last year, overall progress remains slow—particularly in dam construction. Launched in 2010, the project aims to irrigate around 122,000 hectares of land in five districts of the Madhes Province, which is currently experiencing drought conditions.
Government to legalize traditional alcohol through cooperatives
The government is preparing to legalize the production and sale of traditional and homemade alcoholic beverages through cooperative institutions. The Ministry of Industry, Commerce, and Supplies is drafting policies to support this initiative. A report from the Department of Industry recommends issuing licenses for activities like production, blending, bottling, and distribution of local and indigenous alcohol products.
India’s new BIS rule halts Nepal’s steel utensil exports
Nepal’s export of steel utensils has been suspended due to a new Indian rule requiring Bureau of Indian Standards (BIS) certification not only for finished products but also for raw materials. This change, implemented around two months ago, has impacted manufacturers in the Bhairahawa Special Economic Zone.
Free Wi-Fi leads to Rs 14 billion annual loss for telecom companies
The widespread availability of free Wi-Fi hotspots provided by internet service providers is causing telecom companies significant revenue losses. According to internal assessments by Nepal Telecom and Ncell, each company is losing approximately Rs 7 billion annually—adding up to a combined loss of Rs 14 billion—due to consumers opting for free Wi-Fi instead of mobile data services.
FNCCI President says BAFIA amendment could harm the economy
Chandra Prasad Dhakal, President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), has cautioned that proposed changes to the Bank and Financial Institutions Act (BAFIA) could disrupt economic activities. Speaking at a financial policy event organized by the Nepali Congress in Kathmandu, Dhakal urged lawmakers to revise the bill to avoid negative repercussions on the national economy.
First section of Tamakoshi–Kathmandu 400kV transmission line completed
The initial segment of the 400kV transmission line connecting Tamakoshi to Kathmandu has been completed. The Khimti–Bahrabise stretch, spanning 44 kilometers, is now operational and will enable the transfer of electricity from Bahrabise through Khimti to both the Kathmandu Valley and the Terai region. The remaining sections are progressing steadily.
Over 31,000 foreign visitors toured Changunarayan Temple this year
Changunarayan Temple, a UNESCO World Heritage Site, welcomed 31,225 foreign tourists over the past year. According to the Changunarayan Tourist Information Center, 5,756 visitors came from India and other SAARC countries, while 25,459 were from European nations. The temple generated Rs 11.91 million in revenue from entry fees.
Nepal Infrastructure Investment Fund to launch Rs 300 million IPO
Nepal Infrastructure Investment Fund Limited is preparing to offer an IPO worth Rs 300 million. The company has appointed Laxmi Sunrise Capital Limited as the issue manager. A total of 3 million ordinary shares, each priced at Rs 100, will be available to the public.
Birgunj customs handled over 68,000 vehicle imports last fiscal year
In the last fiscal year, 68,743 vehicles entered Nepal through the Birgunj customs point. These ranged from unassembled motorcycles to large construction equipment like cranes. Chief Customs Officer Deepak Lamichhane reported that revenue from fuel-powered vehicles alone reached Rs 17.31 billion, making vehicle imports the second-largest revenue source.
More than 100 million kilograms of garlic imported via Mechi customs
Over 102 million kilograms of garlic were imported into Nepal through Mechi customs last year. The agricultural import had a customs valuation of Rs 1.30 billion, from which the government collected Rs 336.7 million in revenue, according to data from the Mechi Customs Office.
NMB Bank to finance Upper Sardi Khola hydropower project
NMB Bank has entered into a loan investment agreement with Mandakini Hydropower for the Upper Sardi Khola Hydropower Project in Kaski. The 2.9 MW project, located in Machhapuchhre Rural Municipality, has a total estimated cost of Rs 661.89 million. NMB Bank will provide Rs 463.32 million as sole lender.
NIC Asia Bank offers share-backed loan at 8.17% interest
NIC Asia Bank has introduced a share mortgage loan at an interest rate of 8.17%. This offering—based on its average base rate plus a 1% premium—is designed to support investors in the stock market by providing competitively priced financing options secured by shares.
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