KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s latest economic developments reveal a mixed picture of improving financial indicators alongside significant structural and governance challenges. The rebound of the NEPSE index and the rise in turnover suggest that investor confidence has stabilized after recent declines, while higher gold and silver prices indicate continued demand for safe-haven assets amid uncertainty.
Nepal Rastra Bank’s expanding balance sheet and its move to absorb excess liquidity through deposit auctions show that the financial system remains liquid and externally supported by growing foreign exchange assets. The government’s support for NRNA investment proposals and the growth in chhurpi exports point to emerging opportunities in diaspora capital mobilization and niche export sectors.
However, persistent weaknesses in public spending are evident, with substantial unspent budgets returned by Syangja and stalled projects such as the Korala Special Economic Zone due to funding gaps. Security restrictions and curfews in Birgunj, Dhanusha, and Siraha are disrupting trade, transport, and local business activity, raising concerns about broader economic spillovers.
Overall, the economy is showing pockets of resilience, but administrative inefficiency, infrastructure bottlenecks, and social instability continue to constrain sustained and inclusive growth.
NEPSE rebounds 12.96 points as turnover improves
The Nepal Stock Exchange (NEPSE) recovered on Friday, rising 12.96 points, or 0.48 percent, to close at 2,685.54 after four straight sessions of decline. The sensitive index also gained 2.44 points to 470.13. Trading activity improved, with 8.85 million shares of 337 companies exchanged through 46,752 transactions worth Rs 3.759 billion, compared with Rs 3.381 billion a day earlier. Share prices of 180 companies increased, 82 fell, and 13 remained unchanged, while 11 of the 13 sectoral indices ended in positive territory.
Gold rises to Rs 285,000, silver to Rs 4,360
Gold prices increased in the domestic market on Friday, with fine gold rising by Rs 1,000 per tola to Rs 285,000, according to the Federation of Nepal Gold and Silver Dealers’ Association. Silver also gained Rs 50 per tola and was traded at Rs 4,360. On Thursday, gold had been priced at Rs 284,000 per tola and silver at Rs 4,310 per tola.
NRB seeks Rs 25 billion through 61-day deposit auction
To absorb excess liquidity from the banking system, the Nepal Rastra Bank invited bids for Rs 25 billion in 61-day deposits through its monetary management department. Licensed Class A, B, and C financial institutions participated through the Online Bidding System Software (OBSS), with settlement of principal and interest scheduled for October 14 under the open market operations framework.
NRB balance sheet expands beyond Rs 3 trillion
The Nepal Rastra Bank (NRB) reported that its total assets and liabilities had reached Rs 3.874 trillion by mid-July 2026, increasing by about Rs 1.2 trillion from Rs 2.671 trillion in the previous fiscal year. Foreign exchange assets climbed to Rs 3.730 trillion, supported by foreign term deposits, investments in foreign securities, and gold certificate holdings.
Finance Ministry spends 73.21 percent of annual budget
The Ministry of Finance and its subordinate offices utilized 73.21 percent of their allocated budget in fiscal year 2025/26, spending Rs 28.55 billion out of Rs 38.997 billion. Recurrent expenditure execution stood at 68.37 percent, while capital expenditure reached 88.34 percent. Total national budget spending during the fiscal year amounted to Rs 1.581 trillion.
NRB asks payment service providers to support taxpayer incentive program
The Nepal Rastra Bank has instructed payment service providers to facilitate the Taxpayer Incentive Gift Program 2026, which is scheduled to begin on August 6. Under the scheme, consumers making purchases of taxable goods and services worth more than Rs 100 through digital or cash payments will receive gift tickets, with the Inland Revenue Department offering periodic cash prizes subject to a 25 percent withholding tax.
SEBON outlines phased plan for introducing short selling
The Securities Board of Nepal (SEBON) has released a concept paper proposing a phased roadmap for introducing short selling in the capital market. The regulator said margin trading, securities lending and borrowing mechanisms, and a strong information technology infrastructure must be fully developed and regulated before short selling is allowed, with the aim of preventing market manipulation, naked short selling, and artificial price suppression.
Government orders refund of education and health equality fees
The government has directed all institutions that collected education and health equality fees to return the amounts to payers within 15 days or deposit any unclaimed funds into the Federal Consolidated Fund. The notice, published in the Nepal Gazette, follows a Cabinet decision of July 22 taken under the authority of the Economic Act for the current fiscal year.
Nepal Railway suspends Jaynagar–Janakpur–Bhangaha train services
Nepal Railway Company Limited has temporarily halted operations on the Jaynagar–Janakpur–Bhangaha rail section because of security concerns arising from a curfew imposed by the District Administration Office in Dhanusha. The company said services would remain suspended until further notice and would resume once the situation normalizes.
NTB opens applications for Japan and London tourism expos
The Nepal Tourism Board has invited eligible tourism businesses to apply online for participation in Tourism Expo Japan and the World Travel Market in London. Applications for the Japan event will open on August 4, while applications for the London event will begin on August 5. Selection will be made on a first-come, first-served basis, and participating companies will bear their own expenses.
Chhurpi exports from Mechi customs rise nearly 27 percent
The Mechi Customs Office reported exports of Chhurpi worth Rs 1.792 billion in fiscal year 2025/26, marking an increase of nearly 27 percent from Rs 1.417 billion a year earlier. The growth was attributed to rising international demand for the product, which is mainly produced in Ilam, Panchthar, and Taplejung and is widely used as pet food in overseas markets.
Syangja returns more than Rs 1.14 billion in unused budget
The Treasury and Accounts Controller Office in Syangja said Rs 1.146 billion in unspent funds was returned to government accounts during fiscal year 2025/26. The amount represented about 5 percent of the federal allocation and 30 percent of the provincial allocation, with the Infrastructure Development Office accounting for nearly 43 percent of the returned funds, highlighting significant underutilization of capital expenditure.
Birgunj chamber demands urgent action on highway expansion problems
The Birgunj Chamber of Commerce and Industry has urged the government to immediately address problems arising from the ongoing expansion of the Tribhuvan Highway. The chamber said the unplanned demolition of roadside structures has disrupted urban services, affected the city’s appearance, and created risks for residents. Construction debris has blocked drains and sewer lines, causing rainwater and sewage to overflow onto roads, while drinking water pipelines and electricity lines have also been damaged. Warning that poor sanitation during the monsoon could increase the risk of diseases such as cholera, dengue, and malaria, the chamber called for the immediate removal of debris and restoration of essential public utilities.
Government supports NRNA proposals on investment and tax relief
The government has expressed support for proposals put forward by the Non-Resident Nepali Association (NRNA), including co-hosting the World Knowledge Conference 2027 and addressing double taxation issues. Finance Minister Swarnim Wagle told an NRNA delegation that legal and administrative procedures are moving forward to better utilize diaspora expertise and investment. NRNA representatives urged the government to speed up implementation of the NRNA Act and citizenship provisions, saying delays have held back nearly Rs 10 billion in investment commitments, and also requested final approval for the NRNA Nepal Development Fund. The finance minister said work on double taxation relief is underway and pledged to help remove remaining regulatory obstacles.
Korala special economic zone project remains stalled
Plans to establish a Special Economic Zone and dry port at the Korala border crossing between Nepal and China have stalled because no budget has been allocated for preparing a Detailed Project Report. Although the Ministry of Finance had earlier funded a feasibility study by Ojha Engineering covering land at the border and the Mustang Customs Office area in Nechung, further infrastructure planning has not progressed. Local leaders say the high-altitude crossing, located at 4,650 meters, lacks climate-controlled facilities and is forced to close during severe winters. Despite generating more than Rs 5.5 billion in revenue since opening, they are calling for immediate investment in permanent infrastructure to support trade and tourism.
Birgunj restrictions continue for second day, affecting commerce
Economic activity remained disrupted in Birgunj for a second consecutive day as authorities extended prohibitory orders in four parts of the city. The restrictions, in force from 5:00 pm Friday to 6:00 am Saturday, prohibit gatherings of more than five people as well as meetings, rallies, protests, and public assemblies. The District Administration Office in Parsa said the measure is intended to maintain security and warned that violations would lead to legal action. Because Birgunj is Nepal’s main customs and logistics gateway for trade with India, the continued restrictions have raised concerns about possible impacts on commercial activity.
ISPAN seeks final 15-day extension for cable management work
The Internet Service Provider Association of Nepal (ISPAN) has requested a final 15-day extension to complete overhead cable and wire management work on six designated routes in the Kathmandu Valley. The request was made during a high-level meeting chaired by Minister for Information and Communications Bikram Timilsina. ISPAN said about 58 percent of the work has been completed but operational challenges have delayed the remaining tasks.
Curfew keeps economic activity suspended in parts of Dhanusha
Economic activity remained largely suspended in several areas of Dhanusha as an indefinite curfew entered its second day. Public movement was heavily restricted, and authorities continued to ban travel, public gatherings, rallies, protests, and meetings. The District Administration Office said the curfew, imposed from 3:30 pm Thursday, remains necessary to maintain law and order and prevent further unrest. Security restrictions are continuing in parts of Janakpurdham, Nagarain, Laxminiya, and nearby localities, with officials warning of legal action against anyone violating the order.
Siraha remains tense as curfew disrupts business and transport
Economic activity in Siraha also remained largely suspended as the curfew imposed after unrest linked to the Sunsari incident continued in the Lahan–Golbazar area. Markets and businesses stayed closed, traffic on the East-West Highway remained sparse, and the district headquarters was unusually quiet. Police, Armed Police Force personnel, and the Nepal Army maintained a strong security presence in sensitive areas and enforced restrictions on public movement. While the situation in Golbazar showed some improvement, protests resumed in the Kasaha area, where no curfew has been imposed, with demonstrators burning tires on the highway.
Tanahun administration issues compensation notice for Lower Seti project
The District Administration Office in Tanahun has asked 30 landowners in Devghat Rural Municipality-4 of Palpa to collect compensation approved by the Compensation Determination Committee on July 8 for the 126-megawatt Lower Seti Hydropower Project. The project requires about 146 ropanis of land for the powerhouse, offices, and residential facilities. Tanahun Hydropower Limited is leading the project, which is estimated to cost about USD 227 million and is planned to be financed through 30 percent equity and 70 percent debt.
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