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Commercial banks have once again lowered deposit interest rates for the month of mid-December to mid-January, extending a downward trend that has continued for several months amid weak credit demand and sluggish economic activities in the country. According to interest rates for the new months published by banks, most commercial and development banks have reduced the maximum interest rate on individual fixed deposits. Only a few have chosen to keep rates unchanged. 

The latest revisions reflect excess liquidity in the banking system and limited lending opportunities as private sector investment remains subdued. Thirteen out of 20 commercial banks in the country have reduced their maximum interest rate on individual fixed deposits for Poush, while seven banks have continued their rates of Mangsir. 

Prime Commercial Bank, Rastriya Banijya Bank and Global IME Bank have reduced their rates by 0.5 percentage points each, while Prabhu and Agricultural Development Bank have lowered their rates by 0.4 percentage points each, and Kumari Bank by 0.38 percentage points. Seven commercial banks have kept their interest rates unchanged. They include Citizens International, Machhapuchhre, NIC Asia, Siddharttha, Nepal Investment Mega, NMB and Himalaya Bank. 

With the fresh revision, Global IME and Himalaya are offering the highest individual fixed deposit interest rates of 5.5 percent each, while the lowest is 4.25 percent offered by Prime Commercial Bank. With this, the average maximum interest rate on individual fixed deposits have dropped to 4.834 percent from 5.0405 percent in the previous month. The average maximum interest rate on institutional fixed deposits have also come down by 0.13 percentage points in Poush.

A similar trend is visible among national-level development banks.Muktinath, Lumbini, Kamana Sewa, Shangrila and Garima Development Banks have reduced their rates for Poush. With the revision, Muktinath and Lumbini are offering a maximum interest rate of 5.5 percent on individual fixed deposits, while Kamana Sewa, Shangrila and Garima have fixed rates at 5.55 percent. Mahalaxmi Development Bank has kept the rate unchanged at 5.8 percent.

Bankers say interest rates are likely to remain under pressure as long as credit growth stays weak. Despite ample liquidity, banks have struggled to expand lending due to low demand for loans, reflecting broader economic slowdown and delayed investment decisions.

The Current Macroeconomic Situation Report for the first four months of 2025/26, published by the Nepal Rastra Bank (NRB) earlier this week, presents a mixed picture of the country’s economy. While inflation has cooled sharply and external sector indicators remain robust, domestic demand, credit growth and capital spending have continued to lag. This has raised concerns about the sustainability of the recovery. While macroeconomic stability has strengthened, momentum in the real economy is uneven.

Inflation drops to multi-year low

Consumer price inflation eased significantly in mid-November 2025, falling to 1.11 percent year-on-year from 5.6 percent a year earlier. Average inflation during the first four months stood at 1.53 percent, well below 4.59 percent in the same period of the previous fiscal year. This reflects a sharp correction in food prices and subdued domestic demand.

The central bank has set a target of containing inflation below five percent in the current fiscal year.

While food and beverage prices declined by 3.32 percent, mainly due to a steep fall in vegetable prices, non-food and services inflation remained moderate at 3.69 percent. The data suggest that price stability has returned across both rural and urban areas, with inflation staying below two percent in most provinces. However, persistent price increases in services such as education, clothing and miscellaneous goods indicate that inflation risks have not disappeared entirely.

Trade gap widens despite export surge

Nepal trade gap widened further during the review period despite impressive export growth. Merchandise exports surged by 77.5 percent to Rs 93.5bn in the first four months of 2025/26, largely driven by shipments of edible oils, cardamom, jute goods and footwear to India. Exports to India more than doubled, while exports to China fell sharply during the period. 

Imports, meanwhile, rose by 18.7 percent to Rs 609.45bn as consumption gradually picks up. This caused the trade deficit to expand by 12 percent to Rs 515.96bn, reversing last year’s modest contraction. Although the export-import ratio improved to 15.3 percent, imports continue to vastly outpace exports.

Remittances anchor external stability

Remittances remain the single most important pillar of Nepal’s external sector. According to the report, inflows jumped by 31.4 percent to Rs 687.13bn during the review period. A strong growth in remittances has been providing strong support to household consumption as well as foreign exchange reserves and the balance of payments.

The current account recorded a surplus of Rs 279.65bn, nearly double the level of a year earlier, while the overall balance of payments surplus widened to Rs 318.4bn. However, the net services deficit widened to Rs 32.91bn, largely due to a significant 11.8 percent increase in travel payments. Education-related travel payments accounted for over half of this outlay, signaling continued foreign currency outflows for overseas studies.

Likewise, foreign exchange reserves expanded by 14.1 percent to Rs 3055.52bn (or $21.52bn). According to the central bank, the reserves are sufficient to cover more than 20.8 months of merchandise imports.

Weak capital spending

On the fiscal front, government finances show rising expenditure pressures but slow revenue growth. Total government spending reached Rs 468.88bn in the first four months, while revenue mobilization stood at Rs 326.55bn. This resulted in a fiscal deficit of Rs 142bn in the four-month period. 

Capital expenditure declined by more than 26 percent year-on-year to just Rs 25.31bn. This massive decline in development spending, coupled with a minimal revenue, speaks volumes about administrative bottlenecks and a failure to effectively deploy capital for development.

Subdued credit growth

Despite ample liquidity in the financial system, credit expansion remained subdued at 1.2 percent due to low demand from the market. While private sector credit from both commercial banks and finance companies increased 1.3 percent each, credit disbursed by development banks decreased by 0.1 percent.

According to the central bank, total private sector credit remained at Rs 5,562.75 in mid-December. Credit flow toward agriculture and some service sectors has come down, while credit growth has been concentrated in real estate, margin lending and construction-related activities.

The number of people obtaining non-resident citizenship has increased in Chitwan compared to those who have given up their Nepali citizenship.

Since last July, 40 individuals have renounced their citizenship, while 49 have acquired non-resident Nepali citizenship.

Assistant Chief District Officer Chiranjivi Sharma pointed out that among those renouncing their citizenship are 13 women and 27 men. He noted that individuals usually renounce their Nepali citizenship upon arriving in Nepal to obtain non-resident citizenship.

Since July, 20 women and 29 men in the district have successfully secured non-resident citizenship. He explained that to acquire citizenship, one must fill out the form provided by the office, submit a photocopy of their passport, a photocopy of their foreign citizenship, a renunciation certificate of citizenship, and have it verified by a relative or acquaintance.

He mentioned that Nepalis living abroad often seek non-residential citizenship to facilitate investments in Nepal. Additionally, he stated that in the district, the citizenship of two individuals has been revoked.

Citizenship has been revoked for those holding dual citizenship or who have engaged in anti-state activities. Since July, 3,759 individuals have received citizenship based on descent from this office, and 11 individuals have obtained citizenship through marriage.

Armed Police Force (APF) Club of Nepal and India's East Bengal Club are playing for the title of the maiden 'SAFF Women's Club Championship, 2025. The final match is being held at the Dasharath Stadium in Tripureshwor today. It is schedule to start at 5:00 pm.

The two teams qualified for the final as the first and second teams following the league round. The East Bengal club topped the group with three wins and a draw, while home team APF came second with two victories and two draws. 

During the league, the two teams had played a goalless draw and will look forward improve on that to become the inaugural champion of the tournament.  

League champion clubs from five different countries of South Asia participated in the competition being held for the first time ever. The tournament which began on Dec 5 featured APF Football Club from Nepal, East Bengal from India, Nasreen Sports Academy from Bangladesh, Transport United Ladies FC from Bhutan, and Karachi City FC from Pakistan. 

Organized by the All Nepal Football Association (ANFA) the winner of the SAFF Women's Club Championship will receive cash prize of $10,000 while the runner-up will walk home with $5,000. 

Minister for Physical Infrastructure and Transport Kulman Ghising has emphasized on promoting the use of local products throughout the country.

Speaking at the launch of the 'Bamboo Structures Design Guidelines 2082' organized today by Habitat for Humanity Nepal under the slogan 'Bamboo Housing for the Future', he stated that he is planning to encourage the use of local products.

"The use of local production and technology will create employment opportunities. Commercial bamboo cultivation is seen not only to promote domestic demand but also to contribute to foreign currency reserves spent on construction. Therefore, let us use local technology for construction and focus on preserving our originality," the Minister for Physical Infrastructure said.

Ghising, who also holds the portfolio of the Ministry of Urban Development, stated that not using the country's own timber and timber products has had a negative impact on the economy and emphasized the need to pay attention to the use of bamboo and other materials in the construction of durable, technology-friendly, and earthquake-resistant structures.

Secretary at the Ministry of Urban Development, Gopal Prasad Sigdel, stated that the Ministry is ready to emphasize the use of local products.

Director General of the Department of Urban Development and Building Construction, Rabindra Bohara, said that the Department is committed to preparing and implementing the necessary policy arrangements, standards, guidelines and procedures for constructing climate-friendly, earthquake-resistant structures suitable for the local context.

The price of gold has dropped by Rs 2, 000 per tola in the domestic market on Friday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow metal is being traded at Rs 258, 400 per tola today.  It was traded at Rs 260, 400 per tola on Thursday.

Similarly, the price of silver has dropped by Rs 75 and is being traded at Rs 4, 005 per tola.

Shankar Pokharel has been elected as the General Secretary of the CPN-UML from the party’s 11th General Convention.

According to the final results released by the Election Commission, Pokharel secured 1,228 votes to win the post.

Lekhraj Bhatta, Yogesh Bhattarai and Raghubir Mahaseth have been elected as Deputy General Secretaries of the CPN-UML. They emerged victorious at the party’s 11th National Convention.

Among them, Bhatta received the highest number of votes, garnering 1,452 out of the 2,227 votes cast followed by Mahaseth with 1,368 votes and Bhattarai with 1,348 votes.

As per the UML statute, there is a provision for three Deputy General Secretaries.