KATHMANDU: Welcome to Nepal News’ Evening Economic Brief—your go-to source on key financial updates in Nepal. Stay informed with concise insights on market trends, economic indicators, and policy shifts. Here are today’s top economic news highlights.
NEPSE Inches Down by 1.07 Points Despite 18% Rise in Turnover: Despite an 18% increase in trading volume, the NEPSE index declined slightly by 1.07 points on Wednesday, settling at 2,653 points. The total transaction amount reached Rs 9.08 billion, up from Rs 7.65 billion the previous day. Out of the traded companies, 88 saw gains, 159 declined, and one remained unchanged. Sector-wise, the market showed mixed performance. Hydropower rose by 0.74%, life insurance by 0.14%, manufacturing and processing by 0.37%, and the ‘others’ category increased by 0.19%.
NRB Withdraws Rs 90 billion in One Day Amid Liquidity Surplus: Nepal Rastra Bank (NRB) has withdrawn Rs 90 billion from the banking system in a single day on Wednesday to manage excess liquidity. This follows similar moves in the past, where NRB has withdrawn up to Rs 80 billion in a single day. The central bank issued a 21-day auction notice inviting participation from banks and financial institutions, with the auction scheduled for 3 PM Wednesday.
Nepal to Receive Rs 51 billion in Foreign Loans and Grants: The Government of Nepal has decided to secure a total of Rs 51 billion in foreign loans and grants to support various development projects. The decision was made during the Cabinet meeting held on June 16. As part of this financial arrangement, Nepal will receive a concessional loan of Rs 20.79 billion from the World Bank for the improvement and maintenance of bridges across the country. Another major portion of the financial package includes a Rs 29.72 billion loan from the World Bank to improve Nepal’s strategic road network and enhance trade routes.
ADB Unveils 2025–2029 Strategy for Nepal Focusing on Green and Resilient Growth: The Asian Development Bank (ADB) has unveiled a new Country Partnership Strategy for Nepal, effective from 2025 to 2029. The plan emphasizes green, private sector-led, and climate-resilient development to support Nepal’s economic transformation. Its three strategic pillars include: promoting employment-generating green economic transformation led by the private sector, developing quality human capital, and strengthening public services and climate-resilient infrastructure.
Nepal Receives Less Than Half of Expected Foreign Aid Over Five Years: Though the government projects high amounts of foreign grants in each budget—given that such aid need not be repaid—data from the Ministry of Finance show Nepal has received less than half the expected amount over the last five years. The highest aid received in this period was Rs 21.29 billion in FY 2079/80 (2022/23), still falling short of targets.
Electricity Regulatory Commission Seeks Formal Approval of India Power Deal: The Electricity Regulatory Commission has asked Nepal Electricity Authority (NEA) to obtain a board decision approving the Nepal–India Power Exchange Committee agreement signed on Magh 30, 2081 B.S. (February 12, 2025) by former NEA chief Kulman Ghising. NEA had resubmitted the agreement without board approval, prompting the commission to again request formal ratification. Energy Minister Deepak Khadka and current NEA MD Hitendra Dev Shakya have yet to table the agreement for board approval.
JICA Team Inspects 140 MW Tanahun Hydropower Project in Tanahun: A team led by Matsuzaki Mizuki, Chief of the Japan International Cooperation Agency (JICA) Nepal office, conducted an on-site inspection today of the ongoing 140 MW Tanahun Hydropower Project in Jhapatar, Rishing Rural Municipality-1, Tanahun district. JICA has invested in this hydropower project. The team reviewed the progress of construction work under packages 1 and 2, inspecting the structures at the site and holding discussions with the project chief and the chief of the project supervision consultancy. The visit aimed to monitor the project’s development and ensure its timely completion.
Surge in Share Mortgage Loans as Other Sectors Stagnate: While credit expansion in other sectors has struggled, share mortgage lending has surged by 46% in the past year, according to Nepal Rastra Bank. As of mid-April, last year, banks and financial institutions had disbursed Rs 85.95 billion in such loans. By mid-April this year, that figure had reached Rs 125.52 billion. This sharp increase in share-based loans, while other sectors remain stagnant, has sparked debate over whether such lending should continue to be relaxed.
Banks Begin Publishing Names of Credit Card and Phone Loan Defaulters: Banks have started publicly disclosing the names of customers who fail to repay credit card and phone loans on time. The aim is to warn and pressure delinquent borrowers who misuse such facilities. Laxmi Sunrise Bank published a list of 50 such defaulters on Tuesday, citing their failure to clear dues on time after availing of phone loan services.
Private Sector Welcomes Budget, But Implementation Doubts Persist: The private sector has welcomed the upcoming fiscal year’s budget but remains skeptical about its implementation. A notable reason for the positive response is the government’s commitment to study the introduction of a multiple VAT rate system—a long-standing demand of the private sector. VAT reform is viewed as a key part of Nepal’s broader economic reform strategy.
Microfinance Institutions Yet to Align Loan Rates with Base Rate as Deadline Passes: NRB’s midterm review of the monetary policy for FY 2081/82 (2024/25) had mandated that microfinance institutions must set interest rates in line with their base rates by the end of Jestha (mid-June). However, despite the deadline having passed, the new system of interest rate determination has yet to be implemented.
No Tax Exemption on Imports for Foreign Aid Projects: The government has decided not to grant import tax exemptions for construction materials required for foreign-aided infrastructure projects. Instead, exemptions on VAT and excise duties will be provided if the projects use domestically produced materials such as cement, steel, and pipes. This policy, introduced in the FY 2025/26 budget by Finance Minister Bishnu Prasad Paudel, aims to promote the use of locally manufactured materials in donor-supported projects.
Paragliders Must Register Within 3 Months, Says Civil Aviation Authority: The Civil Aviation Authority of Nepal (CAAN) has mandated that all solo and tandem paragliders be registered within three months. All companies operating recreational paragliding under authorization from the Ministry of Culture, Tourism, and Civil Aviation must register their equipment with CAAN’s Flight Safety Standard Department and renew their operating certificates accordingly by the start of FY 2082/83 (2025/26).
Nagdhunga–Sisne Khola Tunnel Likely to Begin Operation Around Early New Year: The Nagdhunga–Sisne Khola tunnel, Nepal’s first road tunnel, is expected to open for operation by Poush 2082 (late December 2025 to mid-January 2026). The contractor has claimed that all construction will be completed before the Dashain festival. According to Senior Divisional Engineer Sanjay Panthi of the Nagdhunga Tunnel Project, the tunnel will begin operation once an operating agency is selected through a competitive bidding process, which is expected to conclude by mid-January 2026.
Bagmati Province Spends Less Than 50% of Budget with One Month Remaining: With only one month left in the fiscal year 2081/82 (2024/25), Bagmati Province has spent just 48.68% of its total budget. Out of the annual allocation, Rs 31.41 billion has been spent so far. Three months ago, only 32.51% (Rs 20.98 billion) of the budget had been utilized.
Madhesh Government to Deploy Women Agriculture Volunteers: In an effort to achieve agricultural self-reliance and address farmers’ challenges, the Madhesh provincial government plans to deploy women agriculture volunteers. The initiative mirrors the success of women health volunteers in bridging citizens with healthcare services. These volunteers will help identify and address agricultural issues, improve access to resources and knowledge, and empower rural women—especially in matters of food security, education, and reproductive health.
Government Aims for Rice Self-Sufficiency in Two Years via Spring Rice Promotion: Announcing the budget for FY 2025/26, the government declared it would achieve rice self-sufficiency within two years by promoting Chaite Dhan (spring paddy). A program has been launched to boost production by 1.2 million tons across 22 districts in the Terai and Inner Madhesh. Support prices for Chaite Dhan have been fixed to encourage farmers this fiscal year, but despite the incentives, the produce has not yet found a market.
Madhesh Province Budget Figures Don’t Add Up, Raising Questions: The budget figures presented by the Madhesh Province government for FY 2025/26 appear to be inconsistent. Finance Minister Sunil Kumar Yadav announced a budget of Rs 46.58 billion on June 15. However, the actual allocations for recurrent and capital expenditures add up to Rs 46.98 billion. Strangely, the budget document incorrectly states the total as “Rs 46.98 billion,” revealing a critical typographical and accounting error.
Kailali Customs Collects Rs 7.81 billion in 11 Months: Kailali Customs Office has collected Rs 7.81 billion in revenue over the first 11 months of the current fiscal year, according to spokesperson Khim Prasad Aryal. With less than a month remaining in current fiscal year, the office collected Rs 2.89 billion in customs duties, Rs 2.91 billion in VAT, Rs 195 million in excise duties, and Rs 1.8 billion under other headings.
Blacktopping Begins on Kakarbhitta-Laukahi Section of Asian Highway: The blacktopping of the Kakarbhitta–Laukahi segment of the Asian Highway, aimed at connecting Asian nations through a common road network, has begun. According to Jagat Prajapati, head of the western section (Itahari office), one lane of the road began being blacktopped from Lakshmimarga on Tuesday. About 23% of the project has been completed in 15 months since the construction agreement.
NMB Bank to Finance Upper Mewa Khola Hydropower Project in Taplejung: NMB Bank has agreed to finance the Upper Mewa Khola Hydropower Project located in Mewa Khola and Meringden Rural Municipality of Taplejung. A bilateral agreement was signed for financing the 17.85 MW project. The deal was signed by Dinesh Dulal, Chief of Sustainable Energy Banking at NMB Bank, and Ganesh Prasad Subba, Managing Director of Kang Hydropower Company, the project’s promoter.
Silver Price Hits New Record, Gold Also Sees Sharp Rise: Silver prices in Nepal are reaching new records, breaking previous highs within days. On Wednesday, silver rose to Rs 2,225 per tola, surpassing Tuesday’s Rs 2,160 and Monday’s Rs 2,165. Gold also saw a steep increase of Rs 900 per tola. The Federation of Nepal Gold and Silver Dealers’ Association fixed Wednesday’s gold price at Rs 195,900 per tola, up from Rs 195,000 the previous day.
