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 Declines by 5.21 Points on Monday: On Monday, the Nepal Stock Exchange (NEPSE) index declined by 5.21 points, closing the day at 2,674 points. This marks the second consecutive day the market has ended in the red, despite recent policy measures aimed at encouraging investment. Just a day earlier, the Nepal Rastra Bank (NRB) had released its third quarterly review of the monetary policy, reducing the risk weight on all types of share loan (margin lending) from 125% to 100%. This move was widely perceived as stock market-friendly, expected to ease credit flows to the equity market. However, the intended boost in investor sentiment has not materialized.

Nepal Rastra Bank Reduces Risk Weight of Share Mortgage Loans by 25 Percentage Points: Nepal Rastra Bank (NRB) has announced a 25-percentage-point reduction in the risk weight of share mortgage loans, equivalent to about Rs 100 billion in credit. In the third quarterly review of the monetary policy for the fiscal year 2081/82, released Sunday, NRB declared that the risk weight for share-backed loans will be reduced from 125% to 100%. Currently, share-backed loans up to Rs 5 million carry a 100% risk weight, while those above that threshold carry 125%. Now, all share mortgage loans will carry a uniform 100% risk weight.

IPO Only After Project Completion Frustrates Hydropower Investors: The government’s plan to allow hydropower companies to issue IPOs only after project completion has disheartened private energy developers. They argue that once projects are completed and revenue begins to flow, there is little need to raise public investment. Prakash Dulal, Deputy General Secretary of Independent Power Producers’ Association Nepal (IPPAN), said such policies could lead to local unrest and hinder construction progress.

Nepal Rastra Bank Adopts Flexible Policy for Stock Market Under New Leadership: Just five days after appointing Dr. Bishwo Nath Poudel as its new Governor, Nepal Rastra Bank has adopted a more flexible approach toward the stock market. The third quarterly review of the monetary policy for FY 2081/82 includes investor-friendly changes. Despite delays due to the late appointment of the governor, investors welcomed the policy shift. The relaxed provisions particularly benefit large investors who take loans using shares as collateral.

Long Wait for Smart Licenses Nears End for Nepali Drivers: The long-standing ordeal for many Nepali citizens awaiting smart driving licenses is finally coming to an end. For years, service-seekers who had passed the trial but did not receive licenses were forced to carry receipts as temporary proof. The root of the delay was a shortage in printing capacity, with the Department of Transport Management operating with only one machine capable of printing smart licenses. As a result, nearly 2.8 million smart licenses remain pending. The department currently needs to print around 5,000 licenses daily to meet the demand.

Government to Increase Income Tax Exemption Threshold in FY 2082/83 Budget: The government, in the final phase of drafting the budget for FY 2082/83, is planning to raise the income tax exemption threshold. The move aims to boost consumer purchasing power and stimulate economic activity. Currently, individuals earning up to Rs 500,000 (single) or Rs 600,000 (couple) are taxed at 1%. The Ministry of Finance plans to raise these thresholds to Rs 600,000 and Rs 700,000 respectively, still maintaining the 1% rate.

Nepal’s Current Account Surplus Reaches Rs 210 billion in First Nine Months: Nepal recorded a current account surplus of Rs 210.22 billion in the first nine months of the current fiscal year, according to the third quarterly review of monetary policy by Nepal Rastra Bank. The balance of payments surplus during the same period was Rs 346.23 billion. In comparison, last year’s figures were Rs 179.83 billion and Rs 365.16 billion respectively. Goods exports increased by 65.2% to Rs 188.20 billion, while imports rose by 12.2% to Rs 1.309 trillion.

Surge in Foreign Chain Hotels in Nepal Reflects Hospitality Sector Growth: In recent times, Nepal has witnessed a rapid increase in foreign-brand chain hotels. In fact, there’s a growing fascination with such international hospitality brands. Currently, more than a dozen five-star hotels in Nepal are operated under foreign chains. This trend indicates rising confidence in foreign brands within Nepal’s hospitality industry and contributes to the promotion of tourism. With the increasing presence of international chain hotels and the potential of Nepal’s tourism sector, investment in hospitality infrastructure—ranging from homestays to star hotels—is also growing rapidly.

BIS Delays by India Curtail Nepal’s Export of Key Products: Delays in certification from India’s Bureau of Indian Standards (BIS) have led to a decline in Nepal’s exports of key goods. BIS certification is mandatory for export, but India has been slow in renewing or issuing new certificates. As a result, exports of products like cement, steel, sanitary pads, and plywood have declined. In the first 10 months of the current fiscal year, exports of cement, clinker, steel, and sanitary products have all decreased.

NEA Pays for Indian Power as Per February Agreement That Cost Kulman His Job: Nepal Electricity Authority (NEA), under Kulman Ghising’s leadership, paid for electricity imported from India based on rates agreed in the Nepal–India Power Exchange Committee (PEC) meeting held on Magh 30, 2081 B.S. Despite adhering to the agreement, Ghising was removed from his post amid criticisms that the deal was expensive. As per NEA sources, Rs 80 million was paid to Uttar Pradesh at INR 8.1/unit. A payment of Rs 180 million to Bihar is also being processed under the same rate.

Nearly 1.7 million Elderly Receive Social Security Allowance in Nepal: According to the latest census, Nepal’s population is nearly 29.3 million, of which about 1.7 million are recipients of the old-age allowance—roughly 5.8% of the total. The program began in 1994 (2051 B.S.) under the UML government in 20 districts, initially providing Rs 100 per month to those aged 70 and above. The scheme has since expanded nationwide, with the monthly allowance now raised to Rs 4,000 and the eligible age reduced to 68.

Government Fails to Distribute ID Cards to Over 1.9 million Registered Farmers: Although more than 1.9 million farmer families have been registered nationwide, the government has failed to distribute identity cards. In FY 2080/81, 1.4 million families were registered; this year, an additional 518,000 were added. However, according to the 62nd report of the Office of the Auditor General, ID cards have not yet been issued. Despite the provision under the Right to Food and Food Sovereignty Act for benefits and state-sponsored retirement plans, implementation remains lacking, as per the audit report.

Few Labor Complaints Lodged in Madhesh Province’s Labor Office Due to Lack of Awareness: The Labor and Employment Office in Madhesh Province receives very few complaints from workers. Many industrialists and business owners are unaware that the labor office is the place to file complaints related to non-payment of minimum wages, lack of accident insurance, and other mandated services. This information was shared by Diwakar Bhujel, the Chief of the Labor and Employment Office in Janakpur.

Tax Exemptions Are Increasing Government Debt, Says NPC Vice Chair: Dr. Shivaraj Adhikari, Vice Chairperson of the National Planning Commission (NPC), stated that tax exemptions are contributing to the rising government debt. Speaking at a stakeholder discussion on reintegrating returnee migrants and promoting internal employment, organized by the Ministry of Labor, Employment, and Social Security, he suggested that tax relief should only be granted to ventures creating substantial employment. He criticized the trend of providing tax exemptions even to those not generating jobs for two people.

Bankers Running Their Own Businesses with Bank Loans Is a Myth, Says FNCCI Chief: President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Chandra Prasad Dhakal, has denied allegations that industrialists run banks to provide themselves with loans. Speaking during a discussion on banking and financial institution-related bills at the House Finance Committee on Monday, Dhakal said, “It is wrong to say businessmen open banks just to lend money to themselves. This narrative is misleading.” He emphasized that very few business owners actually operate their enterprises with loans taken from banks in which they have ownership.

Shivam Cement Launches Second Phase of ‘No Compromise’ Campaign: Shivam Cement, a major player in Nepal’s cement industry, has launched the second phase of its popular brand campaign, No Compromise. The new series carries the message: “It’s not easy to make a promise of no compromise, but those who do walk with pride.” This awareness campaign further reinforces Shivam Cement’s commitment to quality. Since its establishment, the company has exclusively produced and distributed OPC cement, maintaining a strict policy of never compromising on quality.

Panchakanya Group’s Business Declines by 26 Percent: One of Nepal’s largest industrial conglomerates, Panchakanya Group, has reported a 26% decline in total business for the year 2024 compared to 2023. According to financial data, the group’s key subsidiaries—Panchakanya Plastic Industries, Panchakanya Plast Pvt. Ltd., Panchakanya Steel, and Panchakanya Rotomold—registered a combined revenue of NPR 5.84 billion in 2024. In contrast, revenue was NPR 7.86 billion in 2023 and NPR 10.10 billion in 2022.

Private Cold Stores at Risk of Collapse Due to NEA Inaction: Private cold storage facilities across Nepal—operating with billions in private investment—are on the brink of collapse, reportedly due to negligence by the Nepal Electricity Authority (NEA). There are over 70 cold storage units in Nepal, each with a capacity of 500 metric tons. These facilities, which also serve as milk chilling centers, were promised a 50% discount on electricity bills as part of government policy. However, the discount is reportedly not being implemented effectively, pushing private operators toward financial ruin.

Deepak Kunwar Elected President of Housing Developers’ Association: Engineer Deepak Kunwar, Managing Director of CD Developers Pvt. Ltd., has been elected President of the Nepal Land and Housing Developers Association (NLHDA). The election took place during the association’s 18th Annual General Assembly, resulting in the formation of a new 15-member executive committee. Other key positions were filled by Purushottam Paudel as First Vice-President, Sumit Kumar Agrawal as Second Vice-President, and Roshan Bhoyadyo as Third Vice-President. Tulsi Prasad Adhikari was elected General Secretary, Barun Kumar Acharya became Secretary, and Nishchal Bahadur Shrestha was appointed Treasurer.

Mechi Customs Collects Over NPR 12.94 billion in Revenue: The Mechi Customs Office in Kakarbhitta has collected NPR 12.94 billion in revenue from Shrawan to Baisakh of the current fiscal year 2081/82. According to Information Officer Ishwar Kumar Humagain, the collection represents 91.51% of the annual target of NPR 14.14 billion. Last fiscal year, the target for the same period was NPR 15.08 billion, but only 76.85% of the goal was met. This year’s improved performance has been attributed to better compliance and customs management.

Insurance Companies Sitting on NPR 850 billion in Investable Capital: As of the end of Chaitra, insurance companies in Nepal hold over NPR 850 billion in investable funds—equivalent to 45.43% of the national budget for the current fiscal year. Over the past two years, many insurers have launched their own investment companies to manage these funds. Given their large capital base, the government has not only expanded the scope of sectors where insurance companies can invest but has also permitted them to establish dedicated capital firms for investment purposes.

Gold Price Drops by Rs 700 Per Tola on Monday: The price of gold in Nepal dropped by Rs 700 per tola on Monday, according to the Federation of Nepal Gold and Silver Dealers’ Association. The new price has been set at Rs 191,100 per tola, down from Rs 191,800 on the previous day. Earlier, on Baisakh 9, gold had reached a record high of Rs 197,900 per tola. Meanwhile, the price of silver remains stable. For the past few days, silver has been trading consistently at Rs 2,005 per tola.