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.

Nepal Rastra Bank Unveils Monetary Policy for FY 2025/26: Nepal Rastra Bank (NRB) has unveiled its 59th monetary policy for fiscal year 2082/83 on Friday. Governor Dr. Biswo Nath Poudel made the announcement during a public event. Though the central bank was established in 2013 B.S., Nepal began issuing monetary policies from 2023 B.S., with governors officially announcing them since FY 2059/60. On Thursday evening, the proposed policy was tabled at the NRB Board of Directors before today’s release.

NRB Aims to Remove Nepal from FATF Grey List through Stronger AML Measures: Nepal Rastra Bank (NRB) has announced a policy shift to strengthen the monitoring, investigation, and prosecution of suspicious financial transactions in an effort to remove Nepal from the grey list of the Financial Action Task Force (FATF). The new monetary policy for the fiscal year 2025/26, unveiled publicly this week, emphasizes an urgent and coordinated implementation of measures outlined in the FATF-mandated action plan. The monetary policy states that effective coordination among relevant institutions will be ensured to fulfill the action points Nepal has received to exit FATF’s enhanced surveillance list, also known as the grey list.

NEPSE Index Rises by 27.84 Points This Week, Turnover Reaches Rs 40.29 billion: The stock market rose by 27.84 points this week. Over five trading days, the Nepal Stock Exchange (NEPSE) index increased for three days and declined on two, closing at 2,731.80 points. On the last trading day of the previous week, NEPSE stood at 2,703.96 points. The stock market saw a total turnover of Rs 40.29 billion this week, up from Rs 38.80 billion in the previous week.

Home Loan Limits and Loan-to-Value Ratio Raised: Nepal Rastra Bank (NRB) has introduced more flexible policies regarding home loans. Announcing the monetary policy for the upcoming fiscal year 2082/83 (2025/26), Governor Biswo Nath Poudel declared that the maximum loan limit for individuals to purchase homes has been raised to NPR 30 million, up from the previous NPR 20 million. Similarly, the loan limit for home and land purchases has been increased. Previously, banks provided loans up to 50 percent of the property valuation; this has now been raised to 70 percent.

NRB Raises Single Loan Limit for Share-Collateral Loans to Rs 250 million: Nepal Rastra Bank, through its new monetary policy for the upcoming fiscal year, has increased the single loan limit for share-collateral loans. Previously capped at Rs 150 million per individual, Governor Dr. Biswo Nath Poudel has raised the limit to Rs 250 million. Now, an individual can avail share-collateral loans up to Rs 250 million.

Flexible Monetary Policy Introduced with Reduced Interest Rates to Boost Slow Economy: Nepal Rastra Bank has introduced a carefully calibrated flexible monetary policy aimed at revitalizing the sluggish economy, considering the national economic scenario. Under the new policy for the upcoming fiscal year, the central bank has reduced key policy rates. The standing liquidity facility rate (bank rate) has been lowered by 0.5 percentage points to 6 percent. Similarly, the policy rate has been cut from 5 percent to 4.5 percent. Additionally, the standing deposit collection rate has been reduced from 3 percent to 2.75 percent.

Parliamentary Finance Committee to Halt New Stock Exchange License, Direct Restructuring of NEPSE: The Parliamentary Finance Committee is preparing to instruct the Securities Board of Nepal to halt licensing a new stock exchange company and to restructure the existing Nepal Stock Exchange (NEPSE). After discussions with the Securities Board and NEPSE on Thursday, the committee decided to issue this directive. Earlier, on Jestha 29, 2080, the committee had directed not to issue a license for a new stock exchange, but on Kartik 24, 2080, it had declared that directive void. Now, the committee is revisiting the decision.

NRB to Review Working Capital Loan Guidelines in New Monetary Policy: Nepal Rastra Bank (NRB) is set to review its guidelines related to working capital loans. Governor Biswo Nath Poudel, while announcing the monetary policy for the upcoming fiscal year, stated that further revisions will be made to the working capital loan guidelines. The new policy mentions that adjustments will be made based on the nature of businesses and loan repayment cycles of entrepreneurs in agriculture, small and cottage industries, education, health, media, and communication sectors.

NRB to Facilitate Loans for NARC-Recommended Agricultural Crops: Nepal Rastra Bank’s monetary policy for fiscal year 2025/26, unveiled on Friday, includes provisions to ease loan access for increasing the production of agricultural crops recommended by the Nepal Agricultural Research Council (NARC). Governor Dr. Biswo Nath Poudel announced that banks and financial institutions will be encouraged to provide loans for crops identified by NARC as part of efforts to boost agricultural output.

Budget and Monetary Policy Set Different Inflation Targets for upcoming FY: The budget and Nepal Rastra Bank’s monetary policy have set different inflation targets for the upcoming fiscal year. Through the budget statement, Finance Minister Bishnu Prasad Paudel targeted inflation at 5.5 percent. However, Governor Dr. Biswo Nath Poudel, while announcing the monetary policy, set a target to limit inflation at 5.0 percent. While monetary policy is generally a complementary policy to fiscal policy, Governor Paudel has chosen a different inflation target.

Despite Capital Flight Concerns, NRB Signals Further Interest Rate Cuts: Although concerns remain that lowering interest rates could cause capital flight, Governor Dr. Biswo Nath Poudel has introduced policy measures signaling further reductions in interest rates. Governor Poudel has set monetary targets such that the weighted average interbank rate may remain below the policy rate, similar to the current fiscal year. He also reduced all rates within the interest rate corridor to send a clear message that interest rates will decrease further.

Banks Allowed to Count Regulatory Reserve from Non-Banking Assets as Supplementary Capital for Two Years: Nepal Rastra Bank has allowed banks to count the regulatory reserve created from non-banking assets as supplementary capital for up to two years. Governor Dr. Biswo Nath Poudel introduced this policy in the monetary policy for the upcoming fiscal year 2082/83 to improve the capital base of banks.

NRB to Launch ‘Rinibata Nepal Rastra Bank’ to Hear Borrowers’ Grievances: Nepal Rastra Bank will operate a program called ‘Rinisanga Nepal Rastra Bank’ to listen to borrower complaints. Governor Dr. Biswo Nath Poudel announced this while unveiling the monetary policy for fiscal year 2082/83, emphasizing that the program aims to maintain continuous dialogue with borrowers in rural areas.

NRB to Review CD Ratio, Introduce Global Liquidity Standards: Nepal Rastra Bank will review the Credit-to-Deposit (CD) ratio system as announced by Governor Dr. Biswo Nath Poudel in the monetary policy for fiscal year 2082/83. The central bank also declared its plan to implement Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) regulations, aligning with international best practices to reduce liquidity risks and maintain stability.

NRB Shifts Monetary Policy Direction Within Two Months, Adopts Flexible Approach: Nepal Rastra Bank changed the direction of its monetary policy within two months. Governor Dr. Biswo Nath Poudel unveiled a cautiously flexible approach for the monetary policy of fiscal year 2082/83 on Friday. Earlier, the third-quarter review of the current fiscal year’s monetary policy described the direction as carefully balanced.

Banks Must Report Dishonored Checks to Credit Information Center Within 5 Working Days: Banks must send reports of dishonored checks to the Credit Information Center within five working days after receiving the application. Nepal Rastra Bank amended its unified directive for banks and financial institutions to incorporate this provision. According to the revised directive, if an application is received, the bank or financial institution must send a written report to the Credit Information Center within five working days to blacklist the person, firm, company, or institution responsible for issuing the dishonored check and related parties.

Nepal Rastra Bank to Issue Bonds for Improved Liquidity Management: Nepal Rastra Bank is seeking new methods to inject liquidity into the banking system. To manage structural liquidity more effectively, the central bank plans to issue bonds as needed. Currently, NRB uses deposit collection and standing deposit facilities to manage liquidity.

NRB to Integrate National ID System with Banking Sector in Monetary Policy for FY 2082/83: Nepal Rastra Bank’s monetary policy for fiscal year 2082/83 includes plans to integrate the National Identification Card system more effectively with the banking sector. Banks and financial institutions will be able to obtain customer KYC details via the National ID. Once a customer updates their information at one bank, other banks and related agencies will be able to access the data electronically through a shared infrastructure.

NRB Maintains Cash Reserve Ratio at 4 Percent for Upcoming Fiscal Year: Governor Dr. Biswo Nath Poudel announced that Nepal Rastra Bank will maintain the mandatory Cash Reserve Ratio (CRR) for banks and financial institutions unchanged for the upcoming fiscal year. Currently, the CRR is set at 4 percent of deposits.

NRB Announces Relaxation on Working Capital Loans for Agriculture and Communication Sectors: Governor Dr. Biswo Nath Poudel announced a relaxation on working capital loans for productive sectors such as agriculture and communication. This announcement was made while unveiling the monetary policy for fiscal year 2082/83 on Friday.

Kathmandu Metropolitan Sets Budget Size at NPR 2.511 billion for Next Fiscal Year: The Budget Estimation and Limit Determination Committee of Kathmandu Metropolitan City has finalized the budget size for the upcoming fiscal year. On Friday, a meeting held in Mayor Balendra Shah’s office, including committee member secretary and Chief Administrative Officer Saroj Guragain, decided on the budget limit. The meeting, which included Deputy Mayor Sunita Dangol and several ward chairpersons, set the budget at NPR 2.51134 billion (25 billion 113.4 million).

Sudurpashchim Government Accelerates Budget Spending in Asar After Slow Start: After very slow budget spending for nine months, the Sudurpashchim provincial government sharply increased expenditures in Asar. By 25 Asar (July 9), only about 29 percent of the total budget had been spent. According to the Provincial Audit Office, approximately 7.5 percent of the budget was spent in a single day on Wednesday. Capital expenditure reached 66.5 percent, recurrent expenditure 76.81 percent, and the total budget utilization reached 70.65 percent.

NRB Introduces Blacklisting for Dishonored Check Issuers: Nepal Rastra Bank has amended its directive for banks and financial institutions to include a new provision on bounced checks. The Procedure for Certification of Dishonored Checks, 2082 has been issued, allowing banks to blacklist individuals, firms, companies, or related parties who issue dishonored checks. According to the procedure, if a check bounces due to insufficient balance or funds inadequate for payment, the holder may apply to the bank or financial institution to blacklist the issuer and related parties.

Bagmati Province Shows Improvement in Budget Spending Over Last Three Fiscal Years: In the last three fiscal years, Bagmati Province government’s budget spending has shown improvement. According to data from the Province Controller’s Office in Hetauda, the Bagmati government and its affiliated bodies have improved their budget expenditure by 3.05 percent in the current fiscal year. The current fiscal year saw 74 percent of the provincial budget spent, which is the highest rate of spending recorded so far by the provincial government. In fiscal year 2079/080 (2022/23), out of a total budget of NPR 7.033 billion, only NPR 4.666 billion was spent.

Swastik Microfinance Opens IPO for Nepalis Working Abroad: Swastik Microfinance Financial Institution has opened its IPO specifically targeting Nepalis working abroad. In the first phase, the company plans to issue 23,100 shares to migrant workers. After the allocation for migrant workers, the company will issue 195,195 ordinary shares for the general public. Migrant workers can apply for a minimum of 10 and a maximum of 5,000 shares.

Gold Price Fixing Resumes After One Week, Price Drops by RS 300 Per Tola: The Federation of Nepal Gold and Silver Dealers’ Association has resumed fixing prices for gold and silver after a week-long halt. Following an agreement reached between the government and the business community, the federation withdrew all its protest programs and resumed price determination starting Friday. Since Asar 19 (July 3), there had been no price fixing for gold and silver. Compared to Asar 19 (July 3), today’s gold price dropped by NPR 300 per tola. The current price of gold is NPR 191,800 per tola.