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 highlights:

NEPSE Market Capitalization Jumps 37.1% in a Year, Hits Rs. 4.54 Trillion: NEPSE’s market capitalization surged by 37.1% in the past year, reaching Rs. 4.54 trillion by mid-March (Fagun), up from Rs. 3.31 trillion a year earlier, according to Nepal Rastra Bank. The trading sector saw the largest growth at 1277.1%, followed by hydropower (44.4%), development banks (43.8%), and finance companies (38.5%). Insurance companies’ capitalization rose by 24.5%, while commercial banks grew by 23.1%. In terms of sector share, commercial banks lead with 23.6% of total market cap, followed by hydropower (15.7%) and insurance (14.6%). The growth indicates renewed investor confidence and diversification across sectors in Nepal’s capital market.

NEPSE Falls 32.69 Points in a Week, Trading Volume Hits Rs. 20.79 Billion: The NEPSE index fell by 32.69 points this week, closing at 2,670.70, a decline of 1.21%. A total of 36.6 million shares were traded, with turnover reaching Rs. 20.79 billion. Prices rose for only 52 companies, while 192 declined. Sector indices including manufacturing, tourism, development banks, insurance, and hydropower also dipped. Nepal Micro Insurance led gainers with a 30.55% rise, while Upper Hewakhola Hydropower dropped the most (-11.69%). NRN Infrastructure & Development led in trading volume with Rs. 1.8 billion. Nagadi Group Power was the most active by share volume, with over 26 million shares traded.

Credit Growth Sluggish Despite Rising Deposits in Banks: Despite a steady rise in deposits driven by remittance inflows, credit expansion in Nepal’s banking sector remains sluggish. According to Nepal Rastra Bank (NRB), banks have increased lending by Rs 304.82 billion as of mid-March 2024, a 6% rise from the previous year, but this is far from the 12.5% growth target of Rs 650 billion for FY 2024/25. Weak economic activity is attributed as the main reason for the limited credit demand, despite reduced interest rates. Some sectors, such as import-related lending, have shown growth, but overall credit expansion continues to lag, impacting the broader economy.

Commercial Banks’ Non-Banking Assets Surge by 1.07% in a Month: In a span of one month, commercial banks in Nepal saw a 1.07% rise in non-banking assets, adding Rs 766 million in Falgun alone, according to Nepal Rastra Bank. Their total non-banking assets have now reached Rs 36 billion—up from Rs 8 billion in 2021, marking a fourfold increase in three years. While commercial banks struggle to manage these assets, development banks have shown improvement, reducing their non-banking holdings by 2.11% in the same month. Development banks trimmed their total from Rs 3.58 billion in Magh to Rs 3.50 billion in Falgun, indicating relatively better asset management.

Prime Minister KP Sharma Oli Urges Teachers to End Agitation, Promises New School Education Act: Prime Minister KP Sharma Oli has urged teachers to end their ongoing agitation, assuring that the government is committed to introducing the new School Education Act soon. Speaking at a public meeting in Butwal, Oli emphasized that while the government acknowledges the challenges faced by teachers, street protests are not the solution. He reassured educators that the new Act would address the issues within the school education system. Additionally, Oli addressed rumors about his relationship with Tribhuvan University’s Vice-Chancellor, clarifying that there was no conflict and that he had approved the resignation in due process.

Kathmandu District Court Approves 12-Day Detention for Durga Prasain in Tinkune Violence Investigation: The District Court of Kathmandu has granted a 12-day detention order for medical entrepreneur Durga Prasain to allow the police to investigate his involvement in the Tinkune violence that occurred on March 28. Prasain, who was arrested by the Nepal Police in Bhadrapur, Jhapa, on Friday, was presented before the court where Judge Shisir Raj Dhakal approved the detention. Along with Prasain, his security aide Dipak Khadka was also detained. Prasain is reportedly connected to a violent protest by supporters of the ex-king, prompting the government to invoke laws against crimes against the state and organized crime.

PM Oli Asserts UML’s Unstoppable Path to Prosperity, Criticizes Regressive Forces: Prime Minister and CPN (UML) Chair KP Sharma Oli has emphasized that efforts to weaken the UML and disrupt the country’s progress will fail. Speaking at an event in Butwal organized by the party’s Rupandehi district committee, Oli rejected attempts to divide the UML and asserted that even after his time, the party would continue its journey toward prosperity. He also criticized reactionary forces, both domestic and foreign, who he said were attempting to destabilize the country. Oli highlighted his government’s achievements in infrastructure and development, particularly in Lumbini, and urged citizens to support the nation’s democratic republic and development.

Economic Reform Panel Urges Repeal of 15 Outdated Laws to Boost Business Freedom: The High-Level Economic Reform Commission, led by ex-Finance Secretary Rameshore Khanal, has recommended the repeal of 15 outdated laws that restrict economic freedom and increase business costs. In its final report to Finance Minister Bishnu Poudel, the panel cited laws as overly controlling, outdated, or prone to misuse. These include the Black Marketing Act, Foreign Investment Ban Act, and Revenue Leakage Control Act. The commission also suggested drafting new legislation for regulating pharmaceuticals and medical products, replacing the 2035 Drug Act. The goal is to modernize Nepal’s legal framework and encourage a more business-friendly environment.

Minister Dahal Prioritizes Environment-Friendly Transport at International Conference: At the Third International Transport Conference 2025, Minister for Physical Infrastructure and Transport, Devendra Dahal, emphasized Nepal’s commitment to environment-friendly transport and development projects. Addressing the conference, Dahal highlighted the government’s efforts to mitigate environmental damage while accelerating transport infrastructure. Nepal aims to develop a safe, resilient, sustainable, and inclusive transport system, including enhancing urban-rural connectivity and improving public transport and road safety policies. The country is actively advancing key projects, including major highways, the Kathmandu-Terai-Madhes Fast Track, and modern tunnel facilities like the Nagdhunga Tunnel. The conference, themed “Towards Safe, Sustainable, Efficient, and Resilient Mobility,” will conclude on April 13.

Panel Recommends Raising Elderly Allowance Age to 70, Curbing Social Security Spending: The High-Level Economic Reform Commission led by ex-Finance Secretary Rameshore Khanal has recommended increasing the eligibility age for elderly allowance from 68 to 70. The commission, in its report to Finance Minister Bishnu Poudel, also advised not to expand social benefits beyond those listed in the Social Security Act 2075. It proposed halting benefit increases for five years and adjusting them biannually based on inflation thereafter. The report urges integrating all social security data with national ID systems and excluding individuals receiving foreign pensions. The panel aims to limit social security spending to under 4% of GDP and 15% of the federal budget.

Nepal Issues Ultimatum to Social Media Platforms: Register by Mid-April or Face Shutdown: Nepal’s Minister for Communication and Information Technology, Prithivi Subba Gurung, has given an ultimatum to major social media platforms like Facebook, X (formerly Twitter), and YouTube: register with the government by mid-April or face being shut down. Speaking at the Federation of Nepali Journalists’ convention, Gurung emphasized the need for formal registration to tackle unregulated content and scams on these platforms. While the government plans to introduce new media-related bills, including a cybersecurity bill, Gurung reassured that online media will not be targeted. Platforms must appoint local officers or risk a ban if they fail to comply.

Nepali Rupee Weakens Against US Dollar, Impacting Imports and Economy: The Nepali rupee has continued to depreciate against the US dollar, driven by the performance of the Indian rupee to which it is pegged. From Rs 136.68 in early April, the selling rate of one US dollar reached Rs 139.01 by Friday. While the US dollar has weakened against currencies like the Euro and Yen, it has strengthened against the Indian rupee, affecting the Nepali currency. Economists warn that this depreciation will increase the cost of imports, especially petroleum, vehicles, and industrial raw materials, further straining Nepal’s trade deficit and foreign exchange reserves, although remittances and tourism earnings benefit from the stronger dollar.

Insurance Board Ready to Deliver Quality Services, Says Chairman Ojha: Chairman of Nepal Insurance Authority, Sharad Ojha, expressed confidence that insurance companies will move ahead with greater responsibility and integrity to develop and expand the insurance sector. Speaking at a New Year greeting event at the Authority’s central office in Kupandol, Ojha said the Authority is ready to enhance its capacity and deliver quality services. He urged insurers to shift focus from bonuses to term insurance, address risk assessment issues, train employees, and ensure transparency in policy terms. He also encouraged exploration of new areas like housing and promoting term insurance for broader consumer inclusion and investment security.

High-Level Panel Recommends Dissolution of Revenue Investigation Department: A high-level economic reform commission led by former Finance Secretary Rameshore Khanal has recommended dissolving the Revenue Investigation Department, citing redundancy and inefficiency. In its report submitted to Finance Minister Bishnu Poudel, the panel suggested strengthening the Revenue Tribunal and assigning tax investigation duties to relevant existing agencies. The department’s roles in foreign currency misuse and tax evasion can be handled by the Department of Money Laundering Investigation and others, the report says. Businesses have long criticized the department for harassment, and even its director general has faced corruption allegations. The commission includes leaders from Nepal’s major business associations.

Economic Reforms Commission Urges Government to Create Investment-Friendly Environment: The High-level Economic Reforms Recommendation Commission has urged the government to create an investment-friendly environment and reduce production costs to spur economic growth. Commission Chair Rameswar Prasad Khanal highlighted factors such as low credit growth, a decline in real estate transactions, delayed government payments, and the crisis-hit construction sector as key contributors to decreased consumption and investment. The commission called for immediate policy interventions to stimulate demand and structural reforms to improve competitiveness. Finance Minister Bishnu Prasad Poudel expressed confidence in the report and pledged phased implementation of its recommendations as part of the upcoming budget.

Economic Reform Panel Recommends 39-Point Strategy to Accelerate Hydropower Growth: The High-Level Economic Reform Commission, led by former Finance Secretary Rameshore Khanal, has submitted 39 key recommendations to boost Nepal’s hydropower sector. These include streamlining land acquisition and environmental assessment processes, revising outdated policies, encouraging domestic production of hydro-related equipment, and promoting electric appliances to boost power consumption. The panel urged a unified water policy, simplification of foreign investment procedures, and fair power tariff structures. It also emphasized climate resilience, grid modernization, and maximizing economic use of transmission corridors. The commission aims to foster investment, reduce import dependence, and integrate hydropower with broader national development, including agriculture and industry.

Panel Recommends Overhaul of Public Enterprises, Mergers, and Strategic Partnerships: The High-Level Economic Reform Commission has recommended a sweeping reform of public enterprises. It suggests merging government-owned Udayapur and Hetauda cement factories, valuing their assets and liabilities, and partially privatizing them. The panel also advises liquidating five non-operational entities and managing their assets. It proposes restructuring Nepal Airlines by bringing in a foreign strategic partner and transferring Dairy Development Corporation to provincial governments. The report calls for depoliticized management, performance-based appointments, and transforming public institutions into public limited companies with share sales. It also discourages government loans to cover salary or operational costs in failing enterprises.

Commission Urges Banking Sector Overhaul, Specialized Institutions and Credit Reforms: Nepal’s High-Level Economic Reform Commission has recommended transforming banks into specialized financial institutions to minimize risk concentration and promote credit flow to productive sectors. It criticized the dominance of real estate-backed loans, warning that stagnant property markets are impacting loan recovery. The report suggests introducing credit scoring, project-based lending, and stable interest rates for productive sectors. It also advises launching energy and infrastructure bonds, expanding eKYC using national IDs, and improving financial literacy. The commission urges reforms in loan recovery laws and the establishment of an asset management company to address rising non-performing loans and stressed assets.

High-Level Economic Reform Commission Recommends Closure of Five State-Owned Enterprises: The High-Level Economic Reform Commission has recommended the closure of five state-owned enterprises, including Janakpur Cigarette Factory, Butwal Spinning Mills, Nepal Engineering Consultancy Service Center, National Construction Company Nepal, and Nepal Oriented Magnesite Pvt. Ltd. These institutions have failed to operate effectively, and the commission suggests they be closed. The commission further recommends that the government seize their assets and repurpose them for productive use. The closure of these institutions is seen as part of broader efforts to improve economic efficiency and management of state assets.

Gold Price Increases by Rs 4,900 per Tola, Silver Up by Rs 5: The price of gold has surged by Rs 4,900 per tola in the domestic market, reaching Rs 185,000 per tola today, according to the Federation of Nepal Gold and Silver Dealers’ Association. On Thursday, the price stood at Rs 181,100 per tola. Additionally, silver has seen a slight rise of Rs 5 per tola, with the current price set at Rs 1,905 per tola, up from Rs 1,900 per tola on Thursday. The increase in gold and silver prices reflects changing market dynamics and the ongoing demand for precious metals.