Weekly Economic Update (6 January 2023 — 12 January 2023)
1. Banks to the lower interest rate from mid-January
Nepal commercial banks are likely to reduce the current interest rates on deposits from 8 January. The reduction comes after the banks were replenished with surplus liquidity. The interbank rate has also fallen to 6.14% from around 8%.
(Source: https://myrepublica.nagariknetwork.com/news/banks-ready-to-lower-interest-rate-from-mid-january-nba/)
2. Nepal and Bangladesh lobby for electricity trade
Nepal has sought approval from the Indian authorities to export 40–50 MW of electricity to Bangladesh through India’s existing transmission infrastructure. The two countries had decided to request the southern neighbour to allow the export of power from Nepal.
3. Suryabinayak-Dhulikhel road to becoming six-lane expressway
The Araniko Highway, which connects Kathmandu with the Chinese border, will have a 16-km section converted into a six-lane highway. After being put on hold in 2020, the project to widen the two-lane Suryabinayak-Dhulikhel road into a six-lane expressway has been restarted.
(Source: https://kathmandupost.com/money/2023/01/11/suryabinayak-dhulikhel-road-to-become-six-lane-expressway)
4. Industries in crises due to power outage
Due to a reduction in the power generation from the run-of-river-based powerhouses along with the drop in the water levels of the rivers during the dry season, the power outage in the country has been increased. People are facing up to nine hours of electricity outages on a daily basis.
(Source: https://thehimalayantimes.com/business/industries-reeling-under-nine-hour-power-cuts )
5. Illegal crusher industries shut in Kapilvastu
Thirty-three quarries in the district were assessed as illegal as they violated the standards for the operation of quarries. The Home Ministry had issued a circular to all the 77 district administration offices to shut down illicit quarries on January 4 and 15 industries were closed on January 5.
(Source: https://www.nepalnews.com/s/business/illegal-crusher-industries-shut-in-kapilvastu )
6. Nepal to accept FDI in the digital payment system
A new policy allows foreign direct investment in Payment Service Providers (PSPs) and Payment System Operators (PSOs) minimum paid-up capital for a PSP operating instruments other than payment cards raised from NPR 10 million to NPR 50 million.
7. Global IME becomes the largest Nepali bank
Global IME Bank merged with Bank of Kathmandu on Monday and became the largest bank in the country in terms of total capital, paid-up capital, and business size. The bank’s total deposits and extension of loans stand at NPR 412 billion and NPR 377 billion, respectively.
(Source: https://theannapurnaexpress.com/news/global-ime-becomes-the-largest-nepali-bank-36810 )
8. Restaurants adding a VAT on the menu, face fines
According to the Department of Commerce, Supplies and Consumer Protection, it has taken action against three restaurants for charging more than the menu price by fining them NPR 200,000 each on the 7th of January. Officials said that aggrieved diners could send such bills to the office through any means to file complaints.
(Source: https://kathmandupost.com/money/2023/01/06/restaurants-adding-vat-on-menu-price-to-face-fines)
9. Prabhu Bank acquires Century Bank
Prabhu Bank completes its acquisition of Century Commercial Bank. Both banks signed the acquisition agreement on August 25, 2022, agreeing on a share swap ratio of 1:1.
(Source: https://theannapurnaexpress.com/news/prabhu-bank-completes-acquisition-of-century-bank-36869)
10. WB projects Nepal’s economic growth at 5.1%
On 10 January, the World Bank (WB) projected the economic growth rate of Nepal to stand at 5.1% in this fiscal year, downsizing the value by one percentage point. The rate is also lower than its earlier estimate by 0.9% point of Nepal as a whole.
