KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s recent economic indicators reflect cautious optimism, with notable momentum in the capital market and some encouraging fiscal activity. The NEPSE index surged by 53 points, mutual funds announced attractive dividends, and the government repaid over Rs 30 billion in debt in the first month of FY 2025/26—all suggesting renewed investor confidence and stronger financial discipline.
However, deeper challenges remain. Despite increased tourist arrivals, hotel sector stocks have underperformed, and continued protests by sugarcane farmers over unpaid subsidies expose weaknesses in policy delivery.
On the monetary front, Nepal Rastra Bank withdrew Rs 45 billion to manage excess liquidity, while commercial banks scaled back deposits amid falling interest rates. Regulatory reforms, IPO launches, and infrastructure progress—including the Bhote Koshi-I hydropower tunnel and the Kakadvitta–Laukahi road—signal movement toward long-term growth. Yet delays in capital market guidelines and gaps in implementation highlight the need for more consistent and effective governance to sustain momentum.
NEPSE surges by 53 points on Wednesday
The stock market saw a significant rise on Wednesday, with the NEPSE index climbing 53.01 points to reach 2,819. Although it briefly dipped to 2,768 by 11:15 a.m., the market gained steadily throughout the day. Trading activity also increased, with turnover reaching Rs 768 million, up from Rs 418 million the day before. Of the listed companies, 232 recorded gains while 19 declined. All sector indices posted growth, with development banks leading at a 3.40% rise.
Gold prices approach record high once again
Gold prices in Nepal climbed close to record highs on Wednesday, reaching Rs 199,000 per tola—just Rs 400 short of the Rs 199,400 record set on August 8. This marks a Rs 300 increase from the previous day. Meanwhile, silver prices dipped by Rs 15 to Rs 2,345 per tola.
Government repays Rs 30.5 billion debt in first month of FY 2025/26
During the first month of fiscal year 2025/26, the government repaid Rs 30.5 billion in debt. According to the Public Debt Management Office, Rs 27.1 billion was domestic debt and Rs 3.45 billion foreign. The total debt repayment target for this fiscal year is Rs 3.02 trillion. Additionally, the government borrowed Rs 4.457 billion in the same month—Rs 4 billion domestically and Rs 457 million from foreign sources.
NRB withdraws Rs 45 billion amid excess liquidity
Nepal Rastra Bank (NRB) pulled Rs 45 billion from the banking system through an auction, responding to surplus liquidity. The total deposits in the financial system have now surpassed Rs 7.2 trillion. Only “A,” “B,” and “C” class financial institutions authorized by NRB were eligible to participate in the auction. The central bank has continued using deposit collection instruments and standing deposit facilities to control liquidity and stabilize interest rates.
Commercial banks cut deposits at NRB as rates fall
With deposit interest rates falling, commercial banks have reduced their placements with Nepal Rastra Bank. Despite surplus liquidity, NRB has held four deposit collection auctions from mid-July to late August. Banks have scaled back participation in short-term deposit instruments of 31, 25, and 21 days. The start of the new fiscal year also saw a rate cut of up to 0.25% in NRB’s deposit tools.
Government revises concessional loan policies
The government has updated its concessional loan procedures to support traditional occupations, promote entrepreneurship, and assist disaster-affected households with housing. According to the Ministry of Finance, banks and financial institutions will now offer improved loan terms under these changes. Subsidies will be available on interest, insurance, or risk-related charges, and loan ceilings have been raised in several categories.
Nepal exports Rs 49B electricity, imports Rs 65B over four years
In the past four fiscal years, Nepal has exported electricity worth Rs 49 billion while importing Rs 65 billion. Sales primarily targeted India and Bangladesh, totaling Rs 48.84 billion, while electricity imports amounted to Rs 64.74 billion. Nepal began exporting to India in November 2021 with 39 MW, and the volume has increased each year since.
CDSC introduces new guidelines to regulate capital market
CDS and Clearing Limited (CDSC) has issued a new directive titled Securities Dematerialization Operation Guidelines–2025 to help streamline capital market operations. The CDSC board unanimously approved the directive on July 27 and submitted it to the Securities Board of Nepal for approval. However, it remains under review a month later. Sources say the board is still studying the document before approval.
Government seeks wheat import proposals from Indian supplier
The Department of Industry has called on food and flour industries to submit proposals for importing 40,000 metric tons of wheat from India’s National Cooperative Exports Limited (NCL) under a government-to-government deal. A notice published Tuesday set a 7-day deadline for proposals. Only companies capable of importing within the required timeline will receive quota allocations.
Petroleum imports up 3.6% in first month of fiscal year
Petroleum imports through Kakarbhitta rose by 3.6% in the first month of FY 2025/26, totaling Rs 1.5 billion. Mechi Customs Office reported a year-on-year increase of Rs 52.2 million. Corresponding revenue rose by 11.8% or Rs 79.1 million, attributed to the uptick in fuel imports.
Mutual funds boost market appeal with dividend payouts
Mutual funds are drawing more retail investors by declaring dividends based on last fiscal year’s performance. Over 30 funds have announced payouts, with dividend rates ranging from 3% to over 21%. These returns have made mutual funds increasingly attractive to small investors and are contributing to market momentum.
Nepal begins second-year sovereign credit rating assessment
Nepal has entered the second phase of its sovereign credit rating evaluation with international agency Fitch. The country received a “BB-” rating from Fitch on November 22, 2024. The agreement with Fitch covers two years of evaluation and a third year of technical support. Nepal’s rating remains two notches below India’s “BBB-,” but ahead of most South Asian countries.
Government to divest 30% of Nepal Telecom shares by March
The government plans to sell 30% of Nepal Telecom’s shares to the public by March of the current fiscal year. This move is being coordinated by the Government Investment Management Unit under the Ministry of Finance, in collaboration with the Ministry of Communications and Information Technology. Currently, only 8.47% of the company is held by the public and employees, while its paid-up capital stands at Rs 18 billion. As outlined in the national budget, the government will retain majority ownership while expanding public participation.
Hotel stocks lag behind tourism sector growth
Despite rising tourist arrivals and broader economic improvements, listed hotel and tourism companies have seen minimal market performance. While the government anticipated 5% growth in the hospitality sector for FY 2024/25, the six listed firms recorded only 1.43% growth in secondary market trading. Although new star-rated hotels are contributing more to the economy, legacy hotel revenues have remained largely stagnant.
Sugarcane farmers continue protests demanding subsidy payment
Sugarcane farmers continued their protests through Wednesday, demanding payment of the Rs 70 per quintal subsidy pledged by the government for FY 2024/25. The protest, which began at Maitighar, Kathmandu, stems from last year’s price arrangement where the industry paid Rs 585 per quintal and the government committed to cover the remaining Rs 70. Farmers say the subsidy remains unpaid.
Bhote Koshi-I hydropower tunnel breakthrough completed
The 2.638 km tunnel for the Bhote Koshi-I Hydropower Project has achieved breakthrough. The 44 MW project, scheduled for completion by Falgun, is being developed by Promoter Electro Power Pvt. Ltd. with investment from private entities. The tunnel work is being executed by Geology Infrastructure Company, with finishing expected within 6–8 months.
Telegram seeks registration after previous ban over fraud concerns
The messaging app Telegram, which was banned in July over concerns related to online fraud and money laundering, has now formally applied for registration in Nepal. The Ministry of Communications and Information Technology confirmed that the necessary documents were submitted this week and are currently under review.
Sagarmatha Gas Industry destroys over 3,000 unsafe gas cylinders
Sagarmatha Gas Industry in Kavre destroyed 3,030 gas cylinders on Sunday due to safety concerns. The cylinders were either leaking, damaged, expired, or failed safety tests. The destruction process was monitored by the Nepal Oil Corporation, Nepal Bureau of Standards and Metrology, local officials, and consumer rights advocates.
Dang boosts banana production with 730 hectares of cultivation
Dang district, especially the Deukhuri region, cultivated bananas on 730 hectares in FY 2024/25, producing nearly 10,000 metric tons. The previous fiscal year saw cultivation on 670 hectares. Local production satisfies around 70% of demand, though imports increase during festivals.
Kakadvitta–Laukahi road expansion reaches 25% completion
The expansion of the Kakadvitta–Laukahi road—part of the Asian Highway network—has reached 25% completion after 18 months. Funded by a USD 300 million Asian Development Bank loan and domestic investment, the four-lane project covers 95 km out of a planned 120 km and is divided into two sections. The contract was awarded in October 2023.
Bandipur Cable Car opens IPO to public
Bandipur Cable Car & Tourism Limited launched its IPO for the general public on August 27. The offering includes 4,341,080 shares, with a minimum subscription of 10 shares and a maximum of 20,000. The IPO will close on August 31 unless under-subscribed, in which case it will remain open until September 10.
Green Ventures to acquire majority stake in Kaligandaki Garj Hydropower
Green Ventures Limited is acquiring a 51% founding share in Kaligandaki Garj Hydropower Pvt. Ltd. The agreement was finalized on August 26. The company is constructing a 180 MW semi-reservoir project across Mustang and Myagdi districts.
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