KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s latest economic snapshot reflects a mixed but cautious outlook, marked by soft domestic indicators alongside efforts to strengthen financial governance and market activity. While gold and silver prices have eased and banks have trimmed deposit rates due to excess liquidity, government revenue and expenditure remain sluggish, with particularly weak capital spending signaling slow development momentum.
Foreign aid disbursement has also lagged behind targets, underscoring implementation challenges. However, regulatory moves such as the introduction of margin lending by SEBON and the Supreme Court’s intervention to block a tax exemption for Dolma Impact Fund point to tighter financial oversight and attempts to bolster market transparency.
Meanwhile, commercial banks have posted strong growth in trading income amid market volatility and currency gains, and routine updates on dividends and exchange rates indicate steady financial sector operations despite broader fiscal pressures.
Gold and silver prices decline in domestic market
Gold prices fell in the domestic market on Friday, trading at Rs 303,500 per tola (11.66 grams). Silver was priced at Rs 5,000 per tola. On Thursday, gold had closed at Rs 306,500 per tola, while silver stood at Rs 5,340. A day earlier, on Wednesday, gold was traded at Rs 306,600 and silver at Rs 5,290 per tola. Earlier in the week, gold was priced at Rs 305,500 on Tuesday and Rs 304,600 on Monday. Silver traded at Rs 5,240 on Tuesday and Rs 5,250 on Monday. In the international market, gold was quoted at USD 5,065 per ounce, while silver was trading at USD 84 per ounce.
Budget spending reaches 40 percent; capital expenditure at 15 percent in seven months
Government revenue collection and spending have both remained sluggish in the first seven months of the current fiscal year 2082/83 BS. According to the Financial Comptroller General Office (FCGO), revenue collection has reached 44 percent of the annual target, while total expenditure stands at 40 percent. Out of the total budget allocation of Rs 1.964 trillion for the fiscal year, Rs 801.37 billion had been spent by the end of Magh (February 12), representing 40.8 percent of the total allocation. Under the current expenditure heading, Rs 562.37 billion has been spent out of the allocated Rs 1.180 trillion, amounting to 47.62 percent utilization. Meanwhile, capital expenditure remains low, with only Rs 63.72 billion spent out of Rs 407.88 billion allocated—just 15.62 percent. Spending under financial management has reached 46.71 percent. Of the Rs 375.24 billion allocated under this heading, Rs 175.27 billion has been utilized. The government had targeted revenue collection of Rs 1.533 trillion for the fiscal year. By the end of Magh, Rs 682.17 billion had been collected, achieving 44.49 percent of the annual goal.
SC overturns tax exemption decision on Dolma Impact Fund
The Supreme Court has issued an interim order preventing the implementation of the government’s decision to grant tax exemption to Dolma Impact Fund (DIF), stating that such a move could result in irreparable loss to state revenue. A joint bench of Justices Mahesh Sharma Paudel and Balkrishna Dhakal, in an order dated February 11, upheld the short-term interim order previously issued on January 8. Acting on a proposal by Finance Minister Rameshore Prasad Khanal, the government had decided to exempt DIF from income tax. The fund had brought investment into Nepal through a shell company registered in Mauritius, a known tax haven, and has invested in 16 Nepali companies. Challenging the decision, Bhesh Raj Luintel filed a writ petition at the Supreme Court, arguing that the exemption would harm state revenue. In its order, the apex court stated that the decision by the Director General of the Inland Revenue Department (IRD) was inconsistent with existing laws. The court clarified that DIF is not eligible for exemption from capital gains tax and must pay tax in accordance with prevailing legal provisions.
Banks lower deposit interest rates
Most commercial banks have reduced deposit interest rates for the period from February 13 to March 14, citing excess liquidity in the banking sector. The average maximum rate on personal fixed deposits declined from 4.68 percent to 4.56 percent. Global IME Bank implemented the steepest reduction, cutting its rate from 5.5 percent to 4.75 percent. Nepal Bank now offers the highest return at 5.1 percent, while Standard Chartered Bank and Everest Bank remain at the lower end with 4.25 percent. Institutional fixed deposit rates remain capped at 4 percent.
SEBON introduces margin lending for share purchases
The Securities Board of Nepal (SEBON) has enforced the Margin Trading Facility Directive 2026, allowing brokers to provide loans to investors for purchasing shares starting Friday. Investors must maintain an initial margin of 30 percent and a minimum maintenance margin of 20 percent. Brokers can extend loans up to 4.5 times their net worth. Eligible companies must have at least 2.5 million shares listed on NEPSE and demonstrate profitability in at least two of the past three fiscal years. The measure is expected to enhance liquidity and broaden market participation.
Commercial banks’ trading income rises by 34 percent
Nepal’s commercial banks recorded Rs 5.208 billion in net trading income during the first half of the fiscal year, reflecting a 34.36 percent year-on-year increase. Gains were largely driven by stock market volatility and appreciation of the US dollar. Global IME Bank led with Rs 552.4 million in trading income, followed by Nabil Bank at Rs 464.3 million. Out of 20 banks, 19 reported profits, while Agricultural Development Bank posted a trading loss of Rs 118.3 million.
Foreign aid disbursement falls short of target
Nepal has received just 21.27 percent of its projected foreign aid by the end of the second quarter of the current fiscal year. Of the targeted Rs 287.11 billion, only Rs 61.73 billion had been disbursed by January 14. Grant inflows reached 13.3 percent of the target, while loan disbursements stood at 23.1 percent. The Financial Comptroller General Office reported Rs 14.173 billion in pending reimbursements. Officials attribute the gap to weak project implementation and stress the need for improvement.
STC announces 10 percent dividend
Salt Trading Corporation has declared a 10 percent dividend, comprising 9.49 percent bonus shares and 0.51 percent cash, subject to approval at its upcoming Annual General Meeting.
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