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 Index Drops by 35 Points as Market Suffers Broad-Based Decline: The Nepal Stock Exchange (NEPSE) index plunged by 35.07 points on Tuesday, closing at 2,659.59 points. This marks a reversal from Monday, when the index had risen by 1.60%, and last Wednesday’s gain of 17.44 points. Tuesday’s total transaction volume amounted to Rs 6.67 billion, significantly lower than Monday’s turnover of Rs 8.87 billion, reflecting reduced market activity. Out of the traded companies, share prices of 34 firms increased while a staggering 214 declined. Despite the overall dip, shares of Om Megashree and Pure Energy hit positive circuit limits. However, most sectoral indices ended the day in negative territory.

Govt Allocates NPR 846 million Budget for MCC Project in FY 2025/26: The government has allocated NPR 846 million for the MCC project under the Millennium Challenge Account Nepal for fiscal year 2025/26. Out of this, NPR 277 million will be spent by the government, while NPR 568 million will be raised through foreign grants. The MCC project had been suspended by the US government during the Trump administration, but now the government has revived the plan to proceed independently.

Reshuffle of Executive Directors at Nepal Rastra Bank: Nepal Rastra Bank has undergone an internal reshuffle of its executive directors. According to Assistant Information Officer Dr. Bhagwat Acharya, Governor Biswo Paudel transferred two executive directors and appointed one to a new position. Dirgha Rawal, who was recently promoted from director to executive director, has been appointed head of the Bank and Financial Institutions Supervision Department. Meanwhile, former head of bank supervision, Ramu Paudel, has been transferred to the Currency Management Department.

Debate Begins on Proposed Amendment to Allow Bankers to Also Run Businesses: Parliament’s Finance Committee has begun discussion on the first amendment bill to the Bank and Financial Institutions Act (BAFIA), which includes a proposal to allow the same individual to run a bank and a business. Although this issue has long been discussed, it remains controversial. During Monday’s committee meeting, lawmakers debated how to proceed. Given the complexity of this issue in the Nepali context, the committee decided to seek an official opinion from Nepal Rastra Bank on the matter.

Government Allocates NPR 16.92 million for Poverty-Targeted Programs in FY 2025/26: The government plans to spend NPR 16.92 million on poverty-focused programs, including identity card distribution for poor households, in fiscal year 2025/26. Last fiscal year (2023/24), NPR 0.83 million was spent on these programs, and NPR 2.59 million is estimated for fiscal year 2024/25. The budget for 2025/26 is more than six times higher than the current year.

Insurance Companies’ Investments Largely Limited to Fixed Deposits: Most investments by Nepal’s insurance companies are limited to fixed deposits. Around 80% of the investments by life and non-life insurance firms are held in bank accounts. According to Nepal Insurance Authority data, in the five fiscal years from 2019/20 to 2023/24, insurance companies have concentrated their investments mainly in fixed deposits, showing little diversification into other sectors.

EV Importers Face Increased Financial Burden Due to Budget Rumors: Rumors of tax increases in the budget caused EV importers to take large loans, resulting in financial strain. Within 14 days before the budget announcement, 4,689 electric vehicles worth around NPR 2.34 billion were imported. Importers who took bank loans at 7% interest now face heavy interest payments and delays in sales, with vehicles taking 3 to 6 months to sell.

Government Pays Over Rs 14.82 billion Under Contribution-Based Social Security Scheme: The government has paid out more than Rs 14.82 billion under the Contribution-Based Social Security Scheme. Since the scheme’s implementation six and a half years ago, the Social Security Fund (SSF) has collected Rs 81.19 billion and disbursed 15% of the fund as benefits under four different programs. The SSF stated that this amount was disbursed as claims between Shrawan 2076 and Jestha 16, 2082, to workers and their families covered under the scheme.

KMC and Karnali Province to Receive Highest Government Grants in Upcoming Fiscal Year: For FY 2082/83, the federal government will provide the highest amount of grants to Kathmandu Metropolitan City among local levels and to the Karnali Province among provinces. According to a financial transfer report published by the Ministry of Finance on Monday, Kathmandu will receive Rs 2.34 billion through equalization, conditional, special, and supplementary grants. Among local units, the lowest grant—Rs 129.8 million—will go to Narpa Bhumi Rural Municipality in Manang.

Kanti Highway to Remain Closed for Four Days Starting Wednesday: The Kanti Highway Project has announced that the road will be closed for four days from Wednesday to Saturday. The closure is necessary for the installation of a Bailey bridge over the Bagmati River near Baguwa, which falls under the Kanti Highway project. “For the installation of the Bailey bridge, vehicular movement will be completely halted from Jestha 21 to Jestha 24 (Wednesday to Saturday),” the project stated.

Goods Worth Rs 506.67 billion Imported Through Birgunj Border in 10 Months: Goods and items worth Rs 506.67 billion entered Nepal through the Birgunj checkpoint during the first 10 months of the current fiscal year. Compared to the same period in FY 2080/81, the import volume has increased by 12.75%, equating to an additional Rs 57.3 billion worth of goods entering through this border point.

Hotel and Export Sectors Upbeat on Budget for Fiscal Year 2025/26: Though not all expectations were met in the budget for fiscal year 2025/26, many hotel and export sector stakeholders have expressed optimism. Hotel Association Nepal (HAN) President Binayak Shah said the budget announcements have encouraged hotel entrepreneurs, but stronger implementation is necessary.

Sri Lankan and Thai Tourists Increase in Lumbini: Among foreign tourists visiting Lumbini, the number of visitors from Sri Lanka and Thailand is rising. From January to May this year, 12,841 Sri Lankan and 12,068 Thai tourists visited Lumbini. Sri Lanka ranks first and Thailand second in terms of visitors. Most tourists from these countries enter via the Belahiya land border.

Organic Farm Manure to be Distributed to Jumla Farmers: To prevent the use of chemical pesticides and emphasize native production, the Agriculture Development Office in Jumla will distribute organic farm manure to local farmers. Jumla was declared an organic district in 2007 (BS 2064). Use of chemical pesticides like Butachlor is banned, though some hidden use has been detected.

No Progress on Surkhet Medical College After 9 Years: Despite continuous budget allocation for 9 years, there has been no progress on Surkhet Medical College. In the upcoming fiscal year 2025/26 budget, Deputy PM and Finance Minister Bishnu Paudel reiterated plans to construct infrastructure for Surkhet Medical College along with three other colleges. NPR 560 million has been budgeted, but progress remains stuck at the DPR stage.

Bikash Hydropower Limited IPO Subscription Deadline Today: Bikash Hydropower Limited’s IPO subscription ends today, June 3. The company has permission to issue NPR 909.13 million capital, with 49% (NPR 445.46 million) worth of shares being offered. Of this, NPR 99.10 million worth of shares are reserved for local people of the project area.

Stock Market Shows Mixed Reaction After Budget Speech: After Monday’s budget speech, banking and hydropower groups declined, but hotel and investment sectors saw over 2% gains in NEPSE index. Investors are optimistic about hotel and resort businesses following budget provisions that offer income tax and electricity tax exemptions as announced by Finance Minister Bishnu Paudel.

Trade Tower IPO Receives Seven Times More Applications Than Expected: Applications for IPO have exceeded expectations by more than sevenfold at Trade Tower. According to CDS and Clearing, a total of 1,961,391 individuals had applied requesting 23.36 million shares in total. However, the company had only opened 3.29 million shares for public subscription. Today was the final day to apply for the IPO. Although the preliminary notice had indicated Monday as the last day, due to Sunday being a public holiday, the deadline was extended until Tuesday.

Despite Government Support, Farmers in Koshi Still Prefer Imported Rice Seeds: To reduce dependency on foreign rice seeds, the Koshi Province Government is supporting 38 seed production institutions across public, private, and community levels. However, farmers remain reluctant to trust Nepali seeds, preferring imported varieties instead. According to Prakash Kumar Dangi, Acting Director at the Agriculture Development Directorate, rice is cultivated over 276,386.72 hectares in Koshi Province, requiring 18,819.34 metric tons of seeds annually. Of this, only 40% is fulfilled by domestic production, 5% by traditional saved seeds, and the remaining is imported, mainly from India and third countries.

Manjushree Finance and NCHL Sign Agreement on NPS-NS and Domestic Card Scheme: Manjushree Finance and Nepal Clearing House Limited (NCHL) have signed an agreement for principal membership of the NPS-NS and Domestic Card Scheme (Nepal Pay Card). The agreement was signed by Deputy CEO Padam Thakulla on behalf of the finance company and CEO Nilesh Man Singh Pradhan for NCHL.

Gold Price Rises by NPR 2,900 Per Tola on Tuesday: The Federation of Nepal Gold and Silver Traders Association has fixed the gold price at NPR 192,700 thousand per tola for Tuesday. The previous day, it was NPR 189,800 per tola. The silver price has increased by NPR 55 per tola. It was NPR 1,990 per tola the previous day and is now NPR 2,045 per tola.