KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The latest economic updates from Nepal reflect a mix of cautious optimism and underlying structural challenges. While the NEPSE index saw a marginal decline and gold prices fell slightly, silver prices rose, indicating minor market volatility.
On a macro level, Nepal Rastra Bank’s Rs 40 billion liquidity withdrawal and the Rs 10 billion cost incurred through the interest rate corridor highlight persistent liquidity management struggles. Meanwhile, electricity exports surged, driven by trade with India and Bangladesh, showing strength in the energy sector.
However, systemic issues persist—loan recycling remains rampant despite regulatory efforts, and industrial closures in Dhanusha signal deeper economic distress. On the labor front, UAE emerged as the top destination for migrant workers, and Nepal initiated policy shifts to formalize migration to India.
Infrastructure development remains a government priority, with plans to transfer roads to provinces and focus on cleaner urban roads. Additionally, key sectors like automobile sales are rebounding, food labs earned international accreditation, and fertilizer distribution has resumed after delays—signs of ongoing recovery amidst fiscal and administrative frictions.
NEPSE index declines slightly by 1.94 points on Wednesday
The Nepal Stock Exchange (NEPSE) experienced a minor drop on Wednesday, with the benchmark index falling by 1.94 points from the previous trading session, closing at 2,832 points. Interestingly, before the final 15-minute weighted average price calculation, the index had gained 2 points, but it eventually closed in the red after adjustments. During the day, NEPSE reached a high of 2,856 points at 1:46 PM and hit a low of 2,828 points at 11:37 AM.
Gold price decreases, silver price increases
The price of hallmark gold has decreased by Rs 100 to Rs 198,400 per tola (11.66 grams) in the domestic market on Wednesday. Silver, however, saw an increase of Rs 25, trading at Rs 2,305 per tola. This is according to the latest price bulletin from the Federation of Nepal Gold and Silver Dealers’ Association.
NRB withdraws Rs 40 billion to control excess liquidity
Nepal Rastra Bank (NRB) withdrew Rs 40 billion from the financial system on Wednesday through a 40-day deposit collection initiative. This step aims to address the ongoing surplus liquidity in the banking sector, a persistent issue since the beginning of the current fiscal year. Total deposits have now surpassed NPR 7.1 trillion, and to better manage the inflow, the NRB is introducing a bidding mechanism via an online purchasing platform.
NRB incurs Rs 10 billion loss due to interest rate corridor
Nepal Rastra Bank recorded a loss of around Rs 10 billion in the last fiscal year as it implemented its interest rate corridor to manage surplus liquidity. This cost stemmed from efforts to prevent short-term interest rates from falling below the lower threshold of the corridor.
Nepal boosts electricity exports, cuts imports
Nepal earned Rs 17.46 billion from electricity exports in fiscal year 2024/25, marking a notable increase. Power was sold to India and, for the first time, Bangladesh. During the same period, electricity imports from India dropped to Rs 12.92 billion.
Nepal to register migrant workers in India under new policy
The government has approved the registration of Nepali migrant workers in India as part of the newly endorsed National Labor Migration Policy–2025. Approved during a cabinet meeting on Sunday, the policy allows for formal data collection and service provision to Nepali workers in India through local employment service centers.
Capital loan guidelines fail to stop loan recycling
Despite the introduction of the Working Capital Loan Guidelines by the central bank, financial institutions continue the practice of using new loans to pay off existing ones at quarter-end. Data from the final week of the last fiscal year indicates banks and financial institutions disbursed Rs 18.62 billion in credit, raising concerns about loan recycling.
Govt prioritizing dust-free, mud-free road infrastructure
Finance Minister and Deputy Prime Minister Bishnu Prasad Poudel stated that the government is focusing on developing roads that are free from dust and mud. Speaking at a program in Kathmandu on Wednesday, he emphasized that this initiative is not merely a vision but a goal the government is actively working to implement.
Nepal’s food testing labs gain international accreditation
Nepal’s Department of Food Technology and Quality Control has earned international recognition for its testing capabilities. The National Accreditation Board for Testing and Calibration Laboratories (NABL) of India has awarded two-year mutual recognition to Nepal’s food testing sector. Earlier, the National Food and Feed Reference Laboratory (NFFRL) had been certified for 386 testing parameters.
Energy Minister withholds NEA budget over staff transfer conflict
Energy Minister Deepak Khadka has put a hold on the approval of the Nepal Electricity Authority’s (NEA) annual budget due to disagreements with Executive Director Hitendra Dev Shakya regarding staff transfers. Although the budget was submitted to NEA’s board of directors on July 2, it remains unapproved.
Kathmandu adopts mixed approach for land valuation in FY 2025/26
Local authorities in Kathmandu Valley have adopted a mixed strategy in setting minimum government land valuations for fiscal year 2025/26. In parts of Tokha, land values have risen by around 10%. The new valuations cover areas from major roads in municipalities like Budhanilkantha and Dhapasi to interior plots lacking road access.
UAE emerges as top destination for Nepali workers
The United Arab Emirates became the primary destination for Nepali migrant workers in the 2024/25 fiscal year. Data from the Department of Foreign Employment shows that 274,590 labor permits were issued for the UAE, making up 32% of the 839,266 total permits granted.
Federal government to transfer roads and bridges to provinces
The federal government has decided to hand over key transport infrastructures—such as roads and bridges—to provincial governments. Despite federalism being in place, most of these assets remained under federal control until now.
94 industries shut down in Dhanusha during fiscal year 2024/25
Out of 689 firms registered in Dhanusha during fiscal year 2024/25, 94 industries have closed down. The global economic impact post-COVID-19, combined with domestic challenges like economic slowdown, issues in the banking system, and liquidity crunch, has been cited as the reason behind the closures. The shutdown of these businesses has resulted in over 5,000 workers losing their jobs.
Farmers protest end of sugarcane subsidies
Sugarcane farmers in Mahottari are protesting the government’s decision to discontinue the Rs 70 per quintal subsidy. The support was not included in the current fiscal year’s budget, prompting farmers to threaten a major protest in Kathmandu if their demands remain unmet.
Stagnant fertilizer stocks in Nepalgunj begin distribution
Fertilizers that had been stuck at the Salt Trading Corporation Limited’s Provincial Office in Nepalgunj during a period of acute shortage have started being distributed from Tuesday. Although fertilizers had been arriving for the past few days, distribution only began on Tuesday after the Provincial Ministry of Agriculture issued a quota allocation letter on Monday afternoon.
Counterfeit currency busted in Sunsari
Police at the Bhimnagar border post in Sunsari arrested two individuals from India with 38 fake Rs 1,000 notes. The incident, which took place on Wednesday has raised concerns among local business owners about the potential impact of fake currency on their transactions and the market.
Auto dealers report strong sales in FY 2024/25 amid economic Recovery
With Nepal’s economy gradually recovering from the COVID-19 slump, eight major automobile dealers reported high sales figures in the last fiscal year. The automobile sector, which had been in decline due to the pandemic, has shown significant improvement in recent times. In the first nine months of fiscal year 2024/25, dealers of various automobile brands achieved robust sales.
Bheri-Babai Diversion Project reaches 69% completion
Construction on the Bheri-Babai Diversion Multipurpose Project, aimed at providing year-round irrigation and generating 46 megawatts of electricity, has reached 69% completion over 10 years. This falls short of the national goal for such projects to be completed within a decade.
Automobile sector must be a priority in economic policies: NAIMA President
Ritu Singh Vaidya, President of the Nepal Automobile Importers and Manufacturers Association (NAIMA) has emphasized that Nepal’s automobile and mobility sector has been significantly contributing to the country’s economic growth. Speaking at the inaugural session of the NAIMA Mobility Expo, Vaidya highlighted that this sector alone has generated about 4.7% employment within the services sector.
Swastik Laghubitta announces IPO for general public
Swastik Laghubitta Bittiya Sanstha is set to launch an IPO for the general public on Thursday, August 14. The company will issue 195,195 shares at a face value of Rs 100. The application period runs until Sunday, August 17, with a possible extension to August 28 if undersubscribed.
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