KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s economic landscape presents a mixed picture of improving financial stability alongside persistent weaknesses in credit demand, external financing and productive investment. The Nepal Stock Exchange (NEPSE) gained 7.17 points to close at 2,629.40, with turnover reaching Rs 4.40 billion. However, the equal number of advancing and declining companies and the gains recorded by only six of 13 sectoral groups suggest that the market’s improvement was relatively selective rather than broad-based.
A more significant concern is the growing mismatch between liquidity availability and economic activity. Commercial banks are holding around Rs 1.5 trillion in excess liquidity despite historically low interest rates, indicating that cheaper credit has not translated into stronger borrowing, investment or business expansion. Rising remittance inflows have strengthened deposits, but weak credit demand, increasing non-performing loans and continued reliance on informal financing point to deeper structural constraints. Unless liquidity is channelled into productive sectors, its economic impact will remain limited.
At the fiscal level, Finance Minister Dr. Swarnim Wagle’s warning about declining access to foreign grants and highly concessional loans highlights growing pressure on Nepal’s development financing model. The Public Accounts Committee’s directive to bring foreign aid through national systems and subject it to regular audits could improve transparency and fiscal accountability.
Meanwhile, rising gold and silver prices indicate strong demand for safe-haven assets, while EV imports through Korala demonstrate emerging trade and revenue opportunities. Proposed changes to the Nepal Rastra Bank governor’s tenure and SEBON’s stricter margin-lending regulations reflect efforts to strengthen institutional governance and financial-market oversight. The planned resumption of Nepalgunj-Pokhara flights further signals improving tourism connectivity and potential recovery in regional economic activity.
NEPSE gains 7.17 points as turnover reaches Rs 4.40 billion
The Nepal Stock Exchange (NEPSE) index increased by 7.17 points on Thursday, closing at 2,629.40. The Sensitive Index, which tracks large-cap companies, rose 1.88 points to 462.89. Similarly, the Float Index gained 0.42 points to reach 180.38, while the Sensitive Float Index increased by 0.55 points to 156.31. A total of 9,500,766 shares were traded during the session, generating turnover of Rs 4.40 billion. Of the 13 sectoral subgroups, six recorded gains and seven declined. Share prices of 132 companies increased, while 132 companies posted declines and 13 remained unchanged. According to NEPSE, Sarbottam Paints Industries, Mount Everest Power Development Company and NIC Asia Select Fund recorded the strongest gains. Kumari Dhanabriddhi Yojana, Kumari Equity Fund and Khanikhola Hydropower Company were among the biggest decliners.
Nepal’s foreign aid sources shrinking: Finance Minister
Finance Minister Dr. Swarnim Wagle has warned that Nepal is entering a challenging phase as foreign grants and highly concessional loans become increasingly difficult to secure. Speaking at a meeting of the Public Accounts Committee on Thursday, Wagle said Nepal’s access to grants and concessional financing has been shrinking in recent years. “The window for highly concessional loans, which were available at interest rates of 1 to 1.5 percent, with 40-year repayment periods and an eight-year grace period, is now closing,” Wagle said. “I am concerned that this window is narrowing. The grants we are supposed to receive are also drying up.” According to Wagle, Nepal has relied on foreign aid and loans to finance expenditures not covered by domestic revenue since the country’s first budget. However, as the size of the economy and the national budget has grown, the relative share of foreign grants has declined.
PAC directs government to bring foreign aid on-budget
The Public Accounts Committee (PAC) of the House of Representatives has directed the government to mobilize foreign aid received by Nepal through national systems and government funds as far as possible. The Committee has also instructed the concerned authorities to bring expenditures incurred through foreign aid within the scope of regular audits. A meeting held at Singha Durbar on Thursday on the “Audit of Foreign Aid Received by Nepal” issued a nine-point directive on the management, mobilization and utilization of foreign assistance. According to Committee Chair Bharat Bahadur Khadka, the government has been instructed to make arrangements to accept and mobilize only foreign development assistance that is directly linked to approved programmes.
Gold rises to Rs 313,400 per tola; silver reaches Rs 4,855
The price of gold increased by Rs 9,300 per tola (11.66 grams) on Thursday, reaching Rs 313,400. Gold had traded at Rs 304,100 per tola on Wednesday. Silver prices also recorded a significant increase, rising by Rs 260 per tola to Rs 4,855. The precious metal was priced at Rs 4,595 per tola on the previous day.
Nepal’s banks hold Rs 1.5 trillion as loan demand weakens
Nepal’s banking sector is witnessing an unprecedented rise in liquidity, with commercial banks holding around Rs 1.5 trillion in loanable funds as demand for private-sector credit remains subdued. Despite historically low interest rates, businesses and individual borrowers have shown limited interest in taking new loans, leaving banks with substantial excess cash. The situation marks a sharp reversal from previous periods of liquidity shortages, when banks frequently relied on credit facilities from Nepal Rastra Bank (NRB). Banks are now depositing excess funds with the central bank through its standing liquidity facilities to earn interest. During the previous fiscal year, banks deposited more than Rs 4.25 trillion with NRB, and the practice has continued into the current fiscal year. NRB officials say the high level of liquidity has strengthened the banking sector’s immediate financial stability, but the prolonged weakness in lending reflects broader uncertainty in the economy. They have also warned that a recovery in domestic credit demand, accompanied by higher imports, could increase demand for foreign currency and put renewed pressure on the country’s foreign exchange reserves.
Rs 1.5 trillion in idle liquidity weighs on Nepal’s economy
Nepal’s banking system is sitting on approximately Rs 1.5 trillion in excess liquidity as remittance inflows continue to rise while demand for bank loans remains weak. Deposits have expanded significantly faster than lending, driving interest rates to historically low levels without producing a corresponding increase in borrowing or investment. The persistent liquidity surplus is also reducing returns for depositors and increasing the cost to Nepal Rastra Bank of managing excess funds in the financial system. Meanwhile, rising non-performing loans and continued dependence on informal lending indicate that significant gaps remain in access to formal credit. Experiences from economies such as Japan, China and South Korea indicate that reducing interest rates alone may not be sufficient to stimulate credit and investment. Analysts say Nepal needs targeted measures to direct excess liquidity toward productive industries, businesses and infrastructure projects.
EV imports through Korala generate Rs 290 million in one month
Nepal imported 100 electric vehicles (EVs) through the Korala border checkpoint during the first month of the current fiscal year, generating significant customs revenue. According to the Mustang Customs Office, the government collected Rs 290 million from EVs and other goods imported through the checkpoint during the month. Customs Chief Bidur Chudal told RSS that customs clearance is currently being carried out for around 10 containers each day at the border point. During the previous fiscal year, approximately 3,000 EVs were imported through Korala, generating Rs 6.92 billion in government revenue. The checkpoint has increasingly emerged as a new entry route for electric vehicle imports into Nepal.
Preparations to limit the governor’s term to three years
The tenure of the Governor and Board of Directors of Nepal Rastra Bank could be reduced from five years to three years. The Finance Committee reached an agreement on Thursday to introduce the three-year limit as part of proposed amendments to the Nepal Rastra Bank Act, 2002. During discussions on the amendment bill, Committee Chairman Krishna Hari Budhathoki said the proposed legislation also contains a provision that would allow the governor’s term to be extended by an additional two years if their performance is considered satisfactory.
SEBON drafts new rules for margin lending
The Securities Board of Nepal (SEBON) has prepared a draft Margin Loan Trading Regulation, 2026, aimed at establishing a common regulatory framework for margin lending in Nepal’s securities market. Under the proposed rules, institutions providing margin loans would be required to obtain SEBON licences and meet prescribed standards relating to capital adequacy, liquidity, risk management, technology and cybersecurity. The draft also establishes eligibility and suitability criteria for borrowers and restricts margin trading to securities approved for such transactions. The proposed framework includes provisions governing collateral, margin calls and compulsory liquidation. It would also require client assets to be maintained separately from institutional assets. Licensed institutions would be subject to periodic compliance reviews, risk-management requirements and reporting obligations. The regulation is currently only a draft and will come into force after approval by the Government of Nepal and subsequent notification by SEBON specifying its effective date.
SEBON drafts stricter rules to align margin trading with global standards
The Securities Board of Nepal (SEBON) is preparing to replace existing temporary guidelines with a comprehensive regulatory framework for margin trading, with the aim of bringing Nepal’s securities market practices closer to international standards. The proposed rules would strengthen oversight of licensed margin lending providers by introducing routine, risk-based, thematic and special inspections. Institutions providing margin loans would also be required to conduct regular stress tests to evaluate their exposure to risks arising from borrower defaults, liquidity shortages and system failures. The draft regulation is currently open for feedback from the public and relevant stakeholders. After incorporating the received suggestions, SEBON plans to finalize the framework and submit it for formal approval.
Buddha Air to resume Nepalgunj-Pokhara flights from September 16
Buddha Air is set to resume flights between Nepalgunj and Pokhara from September 16, following a suspension of nearly four months. The airline will operate flights on the route every Sunday, Wednesday and Friday. The decision to restore the service comes amid rising passenger demand and an increase in religious tourism in recent weeks. The route offers convenient air connectivity to Pokhara for tourists travelling from Indian cities near Nepalgunj and provides an important link between India’s Uttar Pradesh and Nepal’s major tourist destination. The service had been suspended due to higher fuel prices and a decline in the number of Indian pilgrims. Tourism entrepreneurs have welcomed the decision, saying the resumption of flights will support tourism development in both Nepalgunj and Pokhara.
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