KATHMANDU: Nepal News presents today’s snapshot of Nepal’s economic activities. Get quick updates on major market movements, policy shifts, and financial developments shaping the economy of Nepal. Here are the key economic highlights for today:

NEPSE Falls 0.9% Last Week as Investor Confidence Remains Weak:
The Nepal Stock Exchange (NEPSE) declined by 23.80 points, or 0.90 per cent, last week, reflecting continued weak investor confidence. The benchmark index closed at 2,607.37 points, with losses recorded on four of five trading days. Only the manufacturing and processing and life insurance groups posted gains, while finance and microfinance suffered the steepest declines. Total turnover fell by 2.43 per cent to Rs 20.99 billion, and market capitalisation dropped to Rs 4.377 trillion, eroding about Rs 40 billion in investors’ wealth. Ngadi Group Power led turnover, while Swastik Laghubitta posted the highest price gain.

Net Profits of Banks and Financial Institutions Fall 14.7% Amid Economic Slowdown:
Banks and financial institutions (BFIs) in Nepal saw net profits decline by 14.71% in the first four months of FY 2025/26, earning Rs 21.31 billion compared to Rs 24.99 billion last year, according to NRB data. Commercial banks’ profits fell 13.11%, though Rastriya Banijya Bank and a few others posted gains. The decline is linked to sluggish banking activity, lower loan interest rates, and economic disruptions from the Gen-Z movement. Weighted average lending rates dropped to 7.38%, while the base rate fell to 5.41%. Excess liquidity and a 74.12% credit-to-deposit ratio highlight underutilised loanable funds, pressuring BFI earnings.

NRB to Invest Rs 7.6 Billion in Banks and Financial Institutions from Pension and Employee Funds:
Nepal Rastra Bank (NRB) plans to invest a total of Rs 7.6 billion in banks and financial institutions from its gratuity, pension, and Employee Security Funds. Of this, Rs 6.60 billion from the pension and gratuity fund will be allocated to ‘A’, ‘B’, and ‘C’ class banks and finance companies, while an additional Rs 1 billion from the Employee Security Fund will follow a similar distribution. Eligible institutions must meet criteria on capital adequacy, operational experience, and non-performing loans. Interested banks and financial institutions are invited to submit proposals with interest rates, with deadlines set for December 14 and February 15, respectively.

Nepal’s Public Debt Climbs to Rs. 2.73 Trillion in First Four Months of FY 2025/26:
Nepal’s total outstanding public debt reached Rs. 2,729.41 billion by mid-November 2025, rising by Rs. 55.37 billion in the first four months of the current fiscal year 2025/26, according to the Public Debt Management Office. External debt increased by Rs. 47.63 billion, while domestic debt grew by Rs. 7.74 billion, taking external liabilities to 53.25 per cent of total debt. The debt-to-GDP ratio stands at 42.65 per cent. During the review period, the government mobilised 23.29 per cent of its annual borrowing target and spent Rs. 150.88 billion on debt servicing.

US Dollar Hits Record Rs 144.37, Raising Import Costs and Inflation in Nepal:
The US dollar reached a record high of Rs 144.37 against the Nepali rupee on Saturday, increasing pressure on Nepal’s import-reliant economy. The surge is driven by strong US economic performance, high Federal Reserve interest rates, and a weakening Indian rupee, to which Nepal’s currency is pegged. Higher dollar rates raise the cost of imports, including fuel, medicines, and raw materials, while increasing foreign debt servicing costs. Gold prices also climbed to Rs 256,600 per tola domestically. Nepal Rastra Bank urges export promotion, import management, and prudent exchange rate policies to mitigate long-term economic pressure, despite sufficient foreign reserves.

Second Phase of Petroleum Pipeline Expansion Advances with Indo-Nepal Partnership:
Construction of the second phase of Nepal’s petroleum pipeline expansion has progressed under a joint investment by Nepal Oil Corporation (NOC) and Indian Oil Corporation (IOC). The project includes the Jhapa–Siligudi pipeline, the Siligudi–Charali line with storage depot, and the Amlekhgunj–Lothar pipeline, combining technical and financial support from IOC. NOC will build a storage terminal in Chitwan, while IOC constructs facilities in India. The pipelines, spanning 62 km from Amlekhgunj to Lothar and 50 km from Siligudi to Charali, are expected to reduce annual transport costs by Rs 5–6 billion. Pipeline laying will begin within nine months, enhancing fuel and LPG supply efficiency.

Silver Prices Surge Over 30% as Investors Turn Away from Costly Gold:
Rising gold prices have pushed investors in Nepal towards silver, driving its price up by more than 30 per cent in a month. According to FENEGOSIDA, silver rose by Rs 900 per tola, from Rs 3,015 on November 9 to Rs 3,905 on Friday. Traders say strong domestic and global demand, especially from electronics, solar energy and electric vehicle industries, has tightened supply. Silver is increasingly seen as an affordable alternative for small investors priced out of gold. Meanwhile, gold prices also climbed by Rs 4,200 last week, supported by global rate cuts, geopolitical tensions and rising central bank reserves.

Gandaki CM Pushes for Acceleration of Budhigandaki Hydropower Project:
Gandaki Province Chief Minister Surendra Raj Pandey emphasized the urgent need to advance the construction of the Budhigandaki Hydropower Project, which had previously stalled, during the golden jubilee event at Jageshwar Secondary School in Gorkha. He highlighted that the project, spanning Gorkha and Dhading districts, will not only boost the hydropower sector but also enhance local livelihoods. To expedite completion, joint meetings of Gandaki and Bagmati provincial governments, including local representatives, are being planned in the project corridor. Pandey stressed that positive, collective efforts are essential for national development, urging stakeholders to overcome bureaucratic delays and focus on tangible progress.

India Approves 100% Foreign Investment in Insurance, Potential Impact on Nepal’s Insurance Sector:
The Indian Union Cabinet has approved the Insurance Amendment Bill, 2025, raising foreign direct investment limits in the insurance sector from 74% to 100%. The move aims to attract long-term sustainable investment, facilitate technology transfer, and support India’s goal of universal insurance coverage by 2047. The amendment also requires at least one top executive to be an Indian citizen and allows mergers between insurance and non-insurance companies. Analysts suggest this historic step could set new standards in insurance technology, reinsurance, risk management, and digital services, potentially influencing Nepal’s insurance market, where foreign investment remains limited and mainly concentrated in joint ventures.

CIB Action on Prabhu Bank Triggers Market Anxiety, Questions NRB Authority:
The Central Investigation Bureau’s (CIB) of Nepal Police detention of Prabhu Bank’s CEO and senior officials has created severe psychological pressure in Nepal’s financial market, raising fears of a potential bank run. The action, based on loans already settled and cleared by Nepal Rastra Bank (NRB), highlights a jurisdictional conflict between NRB’s supervisory role and police investigation authority. While Prabhu Bank remains financially sound, CIB’s intervention overrode the regulator’s technical assessment, undermining depositor confidence. Experts warn that disregarding NRB’s expertise in credit risk evaluation could deter bankers from lending, increase systemic risk, and create uncertainty in the banking sector. Coordination between regulatory and investigative bodies is urgently needed.

Annapurna Region Sees Record Tourist Arrivals in 2025, Signalling Strong Trekking Revival:
The Annapurna Conservation Area (ACAP) recorded a historic surge in tourism in 2025, with 273,646 foreign visitors arriving between January and November, one of the highest figures in recent years. Of them, 115,555 were from SAARC countries and 158,091 from other regions. April was the busiest month, followed by October and March. The figure surpasses last year’s total by over 29,000, reflecting a strong post-pandemic recovery. ACAP officials credit improved trekking trails, safety, sanitation, transport access and digital promotion for the growth, expressing optimism for even higher arrivals in 2026.

Nepal Rastra Bank Proposes AI Guidelines to Transform Banking and Financial Sector:
Nepal Rastra Bank (NRB) has drafted guidelines for responsible, ethical, and transparent use of Artificial Intelligence (AI) in banks and financial institutions. The guidance aims to enhance operational efficiency while safeguarding data privacy, mitigating cyber risks, and ensuring non-discriminatory outcomes. It covers applications such as credit scoring, fraud detection, customer service, risk management, and compliance monitoring. NRB expects institutions to classify AI systems by risk, maintain robust structures, and hold management accountable for AI-driven decisions. By promoting AI adoption, the central bank seeks to build a competitive, inclusive, and accessible financial sector while inviting stakeholder feedback on the draft by mid-January.

Indigenous Crop Production Rises by Up to 20% in Humla:
Production of indigenous crops has increased significantly in Humla district as farmers return to traditional farming driven by rising awareness and improved market returns. The Agriculture Development Office reports a 15–20 per cent growth in production compared to last year, reversing a recent decline. Support from the Food Management and Trading Company Limited and local governments has helped promote and market these crops, boosting farmer confidence. Barley, buckwheat, uwa, chino and kaguno remain the main indigenous crops cultivated across the district. Officials say sustained growth will require better irrigation facilities and the introduction of modern farming systems to support farmers’ expanding interest.

Banke Farmer Revives Endangered Kalanamak Rice with Support from Agricultural Authorities:
Kalanamak rice, an indigenous variety once on the brink of extinction due to low returns, is being revived in Banke district through the efforts of local farmer Ganga Narayan Chaudhary. Cultivating the crop for five years with support from the Agricultural Knowledge Centre, Chaudhary produced 40 quintals from 32 katthas this year despite pest-related losses. Though labour-intensive and risky, Kalanamak rice commands a premium price of up to Rs. 10,000 per quintal. As hybrid rice varieties dominate commercial farming, authorities have launched awareness programmes and seed distribution to conserve and promote this traditional crop.

Baskuna’s Orange Orchards Turn Golden, Generating Rs. 15 Million in Sales:
Baskuna village in Beni Municipality–4 has transformed into a golden landscape as orange orchards reach peak harvest season, bringing strong income for local farmers. After shifting from traditional crops like paddy and millet nearly 18 years ago, around 40 households now rely on commercial orange farming. Farmers estimate sales of about Rs. 15 million this year from Baskuna and nearby areas. Traders from major cities are purchasing orchards in advance, offering early payments. With prices ranging from Rs. 60 to 85 per kilogram, Baskuna’s juicy and flavourful oranges continue to enjoy high market demand and steady profits.

NEA Recovers Over Rs. 2.5 Million in a Day Through Dues Recovery Drive in Banke:
Under the Outstanding Dues Recovery Campaign, the Nepal Electricity Authority’s Nepalgunj Distribution Centre collected more than Rs. 2.5 million in unpaid electricity bills in a single day in Banke district. On Monday, dues worth Rs. 2.518 million were recovered from 82 consumers in Nepalgunj and Khajura after long-defaulting customers faced line disconnections. In just four days since the campaign began on November 30, the Centre has collected over Rs. 4.6 million from 188 consumers and disconnected around 400 defaulters. NEA officials said the campaign will continue strictly until all outstanding dues are recovered.

Nepal Begins Methyl Bromide Fumigation, Unlocking Stalled Pine Cone Exports to India:
Nepal has carried out methyl bromide fumigation for the first time at the Integrated Check Post (ICP) in Nepalgunj, nearly 50 years after legal provisions were introduced. The absence of fumigation had halted exports of herbs and pine cones to India, leaving around 2,000 tonnes stuck in warehouses for years. Following sustained pressure from the Herbal Entrepreneurs Association of Nepal, the process has finally begun, with 40 tonnes fumigated initially. Authorities say exports have now resumed, including nearly 100 containers, while entrepreneurs continue to seek a reduction in the 100 per cent export tax.

SANDEE Marks 25 Years with International Conference on Development, Environment and Mountains:
The South Asian Network for Development and Environmental Economics (SANDEE) has marked its 25th anniversary with a three-day international conference in Lalitpur on “Development, Environment, and Mountains.” Organised with ICIMOD, the event features over 70 research presentations by experts from across the world, focusing on climate change, biodiversity loss and sustainable development in the vulnerable Hindu Kush Himalaya region. Sessions cover themes such as biodiversity finance, forest restoration and climate adaptation. Speakers highlighted SANDEE’s role in nurturing over 2,000 researchers and policymakers across South Asia, strengthening evidence-based policymaking and regional collaboration over the past quarter century.