Weekly economic updates (23rd August 2024–29th August 2024)
3 min readAug 30, 2024
- Banks’ fixed deposit interest rate fell from 10.53% to 6.54% over the past year: Commercial banks in Nepal have reduced fixed deposit interest rates to 6.54% per annum due to excess loanable funds and slow credit demand. With limited economic activity, banks have been lowering deposit rates, resulting in an average decrease of 3.99 percentage points over the past year.
(source:https://myrepublica.nagariknetwork.com/news/banks-interest-rate-on-fixed-deposit-dropped-to-6-54-percent-from-10-53-percent-per-annum-in-the-past-one-year/) - Nepal’s Electricity Consumption Triples Post-Load Shedding, Becomes Net Exporter: Nepal’s electricity consumption tripled to 10.02 billion units in FY 2023/24 from 3.72 billion units in FY 2015/16, with per capita usage rising from 131 to 400 units. With 99% of the population now having access to electricity, Nepal became a net exporter to India in 2023. However, meeting growing domestic demand remains a challenge.
(source: https://theannapurnaexpress.com/story/50303/) - Nepal Sees Decline in Agricultural Imports and Exports in FY 2080/81: The Ministry of Agriculture and Livestock Development reported a significant drop in agricultural trade for FY 2080/81, with imports down 20% to NPR 204.12 billion and exports down 32% to NPR 40.59 billion.
(Source:https://www.abhiyandaily.com/article/krssi-upjko-aayaatniryaat-duvai-ghttyo) - NRB Permits MFIs to Reschedule Loans for Next Three Years: Nepal Rastra Bank (NRB) has permitted microfinance institutions (MFIs) to reschedule and restructure loans for the next three years, targeting borrowers in financial distress. The revised directives require implementation by mid-December 2024. MFIs must maintain loan loss provisions for non-performing loans and can only reconcile these after debtors consistently pay interest for a year.
(Source:https://myrepublica.nagariknetwork.com/news/nrb-permits-mfis-to-reschedule-restructure-loans-of-their-clients/) - Nepal Requests China to Convert Pokhara Airport Loan into Grant: Nepal has asked China to convert a 1.38 billion yuan loan (around NPR 25.88 billion) from the China Exim Bank, used to build Pokhara International Airport, into a grant. Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel requested a meeting with Yang Weiqun as the airport has struggled to generate sufficient income to repay the loan.
(Source:https://kathmandupost.com/national/2024/08/23/nepal-asks-china-to-turn-pokhara-airport-loan-into-grant) - ADB to Provide Additional Support to Nepal Through 2025–2029 Strategy: The Asian Development Bank (ADB) has committed to providing further assistance to Nepal. Executive Director Supak Chaiyawan announced additional support through the FY 2025/2029 development partnership strategy. This strategy will focus on enhancing government capacity, promoting the private sector, and supporting education.
(Source:https://nagariknews.nagariknetwork.com/economy/1446189-1724378767.html) - Finance Ministry Meeting Targets Revenue Collection and Anti-Evasion: A meeting chaired by Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel, with Home Minister Ramesh Lekhak and key officials, decided to make revenue collection targets a key performance metric for revenue administration staff and security personnel.
(Source:https://ekantipur.com/business/2024/08/28/a-central-rapid-patrol-team-will-be-formed-and-deployed-to-control-revenue-leakage-14-55.html) - Bagmati province collects less revenue than target: Bagmati Province has collected less revenue than its target in the FY 2023/24. According to the Ministry of Economic Affairs and Planning of Bagmati Province, NPR 9.33 billion less revenue was collected than the target. The Bagmati Province government had estimated to collect NPR 48.25 billion — but collected NPR 39.22 billion.
(Source:https://english.onlinekhabar.com/bagmati-province-collects-less-revenue-than-target.html) - Commercial Banks Reduce Bad Debt, Improve Capital Adequacy: Nepal’s commercial banks reduced their bad debt ratio by 3.34% to 3.76% in the last three months of FY 2023/24, due to enhanced loan recovery and flexible repayment policies. Additionally, 19 of 20 banks now meet the capital adequacy requirements. Standard Chartered Bank had the highest ratio at 17.16%, while NIC Asia Bank had the lowest at 11.18%.
(Source:https://myrepublica.nagariknetwork.com/news/bad-debts-of-commercial-banks-fall-to-3-76-percent-as-of-the-end-of-fy-2023-24/) - Nepal Rastra Bank Waives ‘Countercyclical Buffer’ Requirement for Banks: Nepal Rastra Bank has announced that commercial banks will not need to maintain additional capital under the ‘Countercyclical Buffer’ for the current fiscal year 2081/82. The buffer remains at 0% as the credit-to-GDP gap stays within the Capital Adequacy Framework limits.
(Source:https://www.abhiyandaily.com/article/puunjiikossko-dbaabmaa-rhekaa-bainklaaii-raaht-caaluu-aavmaa-bainkle-atirikt-puunjii-raakhnu-nprne)
