KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.

Nepal’s current economic landscape reflects both optimism and structural challenges. The NEPSE index’s fourth consecutive rise, along with surging trading volumes—especially in the hydropower sector—signals strong investor confidence, even as inflationary pressures are evident in the gold price hike.

The Nepal Rastra Bank’s Rs 60 billion liquidity withdrawal highlights excess cash in the banking system, suggesting cautious monetary tightening. Simultaneously, regulatory efforts—from SEBON’s relaxed compliance deadline to the Finance Minister’s defense of the luxury tax on gold—indicate a balancing act between reform and enforcement.

Infrastructure progress remains uneven, with delays in major road projects like Muglin–Pokhara and Narayangadh–Butwal, while energy initiatives, such as grid expansion and hydropower agreements, point to long-term development goals. Meanwhile, rising paddy seed imports, startup loan distribution, and local industrial growth reflect evolving sectoral dynamics.

However, setbacks like Bangladesh canceling its Upper Karnali electricity purchase and ongoing policy inefficiencies in the insurance and petroleum sectors underscore the fragility of Nepal’s broader economic momentum.

NEPSE surges for fourth straight day

Nepal’s stock market recorded universal gains on Wednesday, with the NEPSE Index, Sensitive Index, and all sectoral indices moving higher. The NEPSE climbed 34.42 points (1.29%) from the previous session to reach 2,694 points—marking its fourth consecutive day of growth. Trading volume also increased significantly: total turnover rose from NPR 7.03 billion to NPR 9.74 billion, led by the hydropower sector with transactions totaling NPR 4.56 billion. Among listed firms, 182 saw share price increases, 65 declined, and one remained unchanged.

Gold price rises by NPR 1,200 per tola, silver drops

Gold prices increased by NPR 1,200 per tola (11.66 grams) in the domestic market, bringing the new rate to NPR 191,700 per tola, up from NPR 190,500. According to the Federation of Nepal Gold and Silver Dealers’ Association, silver prices dropped by NPR 10 and are currently trading at NPR 2,145 per tola.

NRB withdraws Rs 60 billion liquidity amid excess in banking system

Nepal Rastra Bank (NRB) withdrew Rs 60 billion from the market on Wednesday due to surplus liquidity in the banking sector. According to the NRB’s Monetary Management Department, the funds were absorbed via a 63day deposit auction. This action followed a similar Rs 30 billion withdrawal conducted on Sunday. Participating banks and financial institutions submitted bids ranging from a minimum of Rs 100 million to a maximum divisible amount of Rs 500 million.

Finance Minister Poudel defends luxury tax on gold, cites transparency and FATF compliance

Deputy Prime Minister and Finance Minister Bishnu Prasad Poudel clarified that the new luxury tax on gold is intended to boost transparency and help Nepal exit the FATF grey list. Speaking during Wednesday’s National Assembly session on the appropriation bill, Minister Poudel emphasized that this isn’t a new tax; instead, the previous exemption threshold—on gold transactions over Rs 1 million—has been removed to tighten oversight.

SEBON to amend rules to extend deadline for brokers

The Securities Board of Nepal (SEBON) is set to amend the Securities Business Regulations, 2007, granting broker companies that fall short of the paidup capital requirement until the end of Chaitra (midApril) to comply. The proposed amendment has been forwarded to the Ministry of Finance for approval.

Nepal Rastra Bank penalizes two commercial banks and two payment service providers
The NRB has taken action against two banks—Agriculture Development Bank and Jyoti Development Bank—for breaching unified directives. Agriculture Development Bank received a warning for non-compliance with the 2024 Unified Directive for Class A, B, and C banks. Additionally, payment service providers Paywell Nepal Pvt. Ltd. and Sajilo Pay Payment Service had their licenses revoked entirely.

Indian Oil Corporation lowers commercial LPG price in India; NOC keeps price stable

India’s stateowned Indian Oil Corporation (IOC)—which supplies petroleum products to Nepal—reduced the commercial LPG cylinder price in India by INR 58.50, bringing it to INR 1,665 in Delhi as of Tuesday. IOC communicated the update to Nepal Oil Corporation (NOC) on Monday evening, indicating a NPR 51 price decrease per cylinder. However, NOC opted to maintain LPG cylinder prices domestically, while raising rates for petrol, diesel, and aviation fuel.

Bangladesh cancels purchase of 500 MW Upper Karnali hydropower electricity

Bangladesh’s interim government has annulled all energy agreements made under the Special Energy Act, casting doubt over plans to import 500 MW of electricity from the Upper Karnali Hydropower Project. While India had proposed transmitting power via a 117kilometre, 765 kV line, the interim administration has shown no interest in pursuing the initiative, which was previously supported by the Awami League government.

Government targets 100% electricity access within two years

Energy, Water Resources and Irrigation Minister Deepak Khadka announced that the government aims to achieve 100% electricity access nationwide within two years. During Wednesday’s National Assembly budget session, he also reported ongoing initiatives to raise percapita electricity consumption to 1,500 units annually. Minister Khadka expressed confidence that reaching these targets would position Nepal as an energy exporter and generate NPR 8.886 billion in revenue.

Unusual increase in paddy seed imports in recent years

Paddy seed imports have surged in recent years as farmers increasingly opt for higheryield hybrid varieties. In the first 11 months of the current fiscal year, NPR 116 million worth of seeds were imported, compared to NPR 88.65 million in the same period last year. Imports primarily come from India and China, with an open border facilitating significant unregulated inflows from India.

Life Insurance Association requests reduction of reserve fund from 50% to 20%

The Life Insurance Business Association has petitioned the Insurance Authority to lower the mandatory reserve fund requirement from 50% to 20%. They argue that the current practice—under which Nepali Reinsurance Company accepts lowrisk businesses but rejects highrisk ones—delays policy issuance, causing many policyholders to receive documents late.

Government increases re-appropriation of funds near fiscal yearend

As the fiscal year 2081/82 (2024/25) draws to a close, the government has increased budget reappropriation—shifting funds from unspent allocations to other headings. The Ministry of Finance reported that over NPR 450 million in capital expenditure was reappropriated during Baisakh (midApril to midMay).

Narayangadh–Butwal road construction reaches 69% completion

Construction of the Narayangadh–Butwal road has achieved 69% physical progress. Shiva Khanal, information officer for the project’s eastern section, noted that the third extension period is nearing its end. China State Construction Corporation began the work on Magh 24, 2075 BS (February 7, 2019), with an initial deadline of Shrawan 22, 2079 BS (August 7, 2022). Despite two deadline extensions, the latest being until Shrawan 8, 2082 BS (July 24, 2025), significant work remains incomplete.

Muglin–Pokhara road expansion project faces delay

The Muglin–Pokhara road expansion will not meet its scheduled completion deadline. The project is split into two sections: the eastern section has reached 85% physical progress with only 10 days left, while the western section shows just 54% progress despite having six months remaining. Due to slow construction, neither section is expected to finish on time. The road, being expanded from two to four lanes (and six lanes in market areas), is funded through a concessional loan from the Asian Development Bank (ADB).

Chilime Hydropower Project generates 22.1 MW daily

Located in Syafrubesi, Rasuwa district, the Chilime Hydropower Project is currently generating 22.1 MW of electricity per day. Deputy Manager Bimal Khadka said the plant, situated in Gosainkunda Rural Municipality-5, is operating at full capacity during the monsoon season, though it drops to 50% capacity during drier periods.

RPGCL signs grid connection agreement with five hydropower firms

Rastriya Prasaran Grid Company Limited (RPGCL) has signed a grid connection agreement with five hydropower developers. The agreement was signed by RPGCL CEO E. Sagar Shrestha and representatives from the respective companies. The five projects, totaling 607 MW, include Tilga (91 MW) in Kalikot, Malumela Seti River Peaking (72 MW) in Bajhang, Mahakali Seti Reservoir (54 MW), Upper Mewa Khola ‘A’ (31.92 MW) in Taplejung, and Super Daraundi (9.143 MW) in Gorkha.

Startup loans worth NPR 240 million distributed to 353 entrepreneurs

A total of NPR 240 million in startup loans has been disbursed to 353 entrepreneurs selected for fiscal year 2081/82 (2024/25). According to the Industrial Enterprise Development Institute, loans are being distributed at 3% interest, up to a maximum of NPR 2.5 million per person. Distribution to all 661 selected recipients is expected to conclude by Ashad (mid-July).

Skywalks under construction in Babarmahal and Shantinagar, Kathmandu

Construction is underway for pedestrian skywalks in two busy areas of Kathmandu—Babarmahal (in front of the District Court) and Shantinagar. These projects aim to enhance pedestrian safety in high-traffic zones. The Ministry of Physical Infrastructure has allocated NPR 25 million for the Babarmahal skywalk and NPR 40 million for the one in Minbhawan.

Study begins for copper mining in Myagdi’s Malika Rural Municipality

Copper mining exploration has begun in Okharbot, located in Malika Rural Municipality of Myagdi. M/S Dongyi Minerals Pvt. Ltd., authorized by the Department of Mines and Geology, is currently preparing an environmental impact assessment. Ward Chair Moti Prasad Budhathoki of Malika-3 stated that a team of geologists will assess copper availability and potential environmental effects.

Cable car project planned near Supadeurali Temple

A cable car is set to be developed near Supadeurali Temple in Arghakhanchi to attract both domestic and international tourists. Sandhikharka Municipality approved Supadeurali Cable Car Pvt. Ltd. for industry registration during its executive meeting on Ashad 13 (June 27). The cable car will connect Supadeurali Temple to Masina Lake, according to Mayor Krishna Prasad Shrestha.

PhonePe and Kumari Bank launch virtual credit card

PhonePe, in collaboration with Kumari Bank Limited, has launched the Kumari PhonePe Credit Card—a virtual card now available to Kumari Bank customers via the Kumari Smart Mobile Banking app. The initiative is expected to strengthen Nepal’s digital credit infrastructure.

Ganapati Door and Plywood Industry sees NPR 766 million turnover in 2024/25

Ganapati Door and Plywood Industry reported a turnover of NPR 766 million in the current fiscal year 2024/25, a 19% increase from NPR 642 million in 2023/24. The company had a turnover of NPR 549 million in 2022/23 and recorded a net profit of NPR 24 million this fiscal year.

Bikas Hydropower IPO opens for public subscription

Bikas Hydropower has opened its Initial Public Offering (IPO) to the general public. Managed by Prabhu Capital, the IPO offers 2,942,760 shares. The company’s paid-up capital stands at NPR 909.13 million. Prior to this offering, shares were allotted to migrant workers and local residents impacted by the project.