Submit your Article

The Nepal Stock Exchange (NEPSE) plunged by 11. 81 points to close at 1,972.15 points on Wednesday. Similarly, the sensitive index dropped by 4. 72 points to close at 381. 32 points. A total of 6,530,415 unit shares of 257 companies were traded for Rs 2. 15 billion. Meanwhile, Central Finance Co. Ltd, Prabhu Life Insurance Limited and Dhaulagiri Laghubitta Bittiya Sanstha Limited were the top gainers today with their price surging by 10 percent. Likewise, Mahuli Laghubitta Bittiya Sanstha Limited was the top loser with its price dropped by 5. 20 percent. At the end of the day, the total market capitalization stood at Rs 2. 85 trillion.

Advocate Dr Dinmani Pokharel has been appointed to the post of attorney general. President Bidya Devi Bhandari appointed Pokharel to the post as per Article 157 (2) of the Constitution on Wednesday, Sagar Acharya, spokesperson at the President’s Office said. The attorney general is the chief legal advisor of the government and is appointed by the President at the recommendation of the prime minister. Prime Minister Pushpa Kamal Dahal had recommended Pokharel to the post on Tuesday. Pokharel was the legal advisor of the then Speaker Onsari Gharti Magar. Attorney General Khamma Bahadur Khati resigned on Monday after the formation of a new government under the leadership of CPN (Maoist Center) Chairman Pushpa Kamal Dahal. There is a culture of changing the legal advisor of the government with the change of the government.

Ram Sahaya Yadav has been elected the Parliamentary Party leader of the Janata Samajbadi Party on Wednesday. JSP spokesperson Manish Suman said Yadav was elected to the post unanimously. Only Yadav's nomination was filed for the election to the party's Parliamentary Party leader and the Election Committee declared him elected to the post unopposed. Yadav is elected to the House of Representatives, the lower house of the Federal Parliament, from Bara-2. JSP Federal Council Chairman Ashok Rai and lawmakers Raj Kishor Yadav and Nawal Kishor Saha had also shown their interest in the post, but they did not file their candidacy to the post at the time of the filing of nominations. JSP has 12 lawmakers in the House of Representatives. The party has supported the government led by CPN (Maoist Centre) Chair Pushpa Kamal Dahal.

Senior leaders of the ruling coalition held a meeting at the Cityscape Apartment in Lalitpur on Wednesday. Prime Minister Pushpa Kamal Dahal and CPN (Unified Socialist) Chairman Madhav Kumar Nepal had reached there for the discussion. Dahal, CPN (Maoist Center) senior Vice-Chairman Narayankaji Shrestha and Nepal among others leaders discussed contemporary political issues. Dahal has been urging CPN-UML Chairman KP Sharma Oli and CPN (Unified Socialist) Chairman Nepal to join hands together. Prime Minister Dahal has been trying to arrange a meeting between them. Oli and Nepal held a dialogue for the first time during the swearing-in ceremony of the Prime Minister organized in Sheetal Niwas after the party split. According to a source, Nepal and UML Vice-Chairman Bishnu Paudel, who is also a Deputy Prime Minister and Finance Minister, held a meeting on Tuesday night to rope in the former’s party in the government. The ministers of the CPN (Unified Socialist) has been piling pressure on Nepal to create an environment to join the government. Earlier on Tuesday, Nepal said that Dahal became the prime minister without informing him. “Dahal became the prime minister without informing our party. We came to know only after seeing his photo in the newspaper,” he said, adding, “I am disappointed with the behavior of Dahal. We became the victim of both Nepali Congress and Maoist Center.”  

With the formation of the new government, the private sector has become active to apprise the country's leadership about the state of the recession-mired economy. On Tuesday a Federation of Nepalese Chambers and Industry (FNCCI) delegation met with Prime Minister Pushpa Kamal Dahal and Finance Minister Bishnu Paudel. Anjan Shrestha, Vice President of FNCCI was also part of the delegation. ApEx talked to Shrestha about the meetings and the demands and suggestions of FNCCI to bring the derailed economy back on track. Excerpts: How do you expect the new government to address the country's economic woes? Revitalizing the economy should be the top priority of the government. Neither the private sector nor the government or the general public can bear the brunt of the crisis anymore. There will be more problems in the economy in the coming days if the problems go unaddressed. Hence, the government needs to pay heed to the suggestions of the private sector and work proactively to resolve the issues. What issues were raised by the FNCCI delegation in the meeting with newly appointed Prime Minister Pushpa Kamal Dahal on Tuesday?  As the country's economy is in crisis, we met the new Prime Minister to apprise him about the state of the economy and private sector. We also suggested possible steps the government should take to bring the economy on the right track. We are surrounded by the liquidity crisis in the market which has led to interest rates remaining persistently higher and has contributed to the sharp contraction in business activities. The money cycle in the market has been badly affected. How serious is the new PM to address the private sector's concerns? The PM told us that he understands the problems surrounding the economy and our concerns and stressed that reviving the economy is the government's first priority. He said the very first meeting of the Council of Ministers has made a special decision in this regard.  FNCCI also met Finance Minister Bishnu Poudel on Tuesday. What was the private sector's main agenda and what was his response? We found that he understands the problems in the economy. He told us that the government and private sector are complementary to each other. We have clearly stated our demands and have suggested ways to end the economic slowdown. We hope the new government will work seriously to take the country’s economy out of the slump.  FNCCI has been strongly demanding the deferral of the guidelines on working capital loans. How does the private sector not want this monetary arrangement to be implemented? The postponement of guidelines on working capital loans is our main demand. Given the current situation where most business activities have almost stagnated, it is not possible to implement the guidelines. So, we have been demanding that its implementation should be deferred by at least two years. What is the current status revenue collection ?  The government's revenue collection has declined mainly due to weakening demands and a slowdown in business activities. The businessmen are struggling to repay the banks' interest rates and loan installments. Hence, our demand is to extend the deadline. Automobiles are one of the major verticals of your business group. The government has recently lifted restrictions on automobile imports. Have importers started to open Letters of Credit (LC) to import vehicles? Importers are gradually opening the LCs after the government lifted import restrictions. However, there is no enthusiasm in the automobile sector at the moment. Except for electric vehicles, the demand is depressed in the market. The automobile business will not bounce back until there is sufficient liquidity in the banking system to finance the auto loans.

The price of gold has increased by Rs 400 per tola in the domestic market on Wednesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 101, 100 per tola today. It was traded at Rs 100, 700 on Tuesday. Meanwhile, tejabi gold is being traded at Rs 100, 600 per tola. Similarly, the price of silver is increased by Rs 10 and is being traded at Rs 1, 400 per tola today.

Prime Minister and CPN (Maoist Center) Chairman Pushpa Kamal Dahal and CPN-UML Chairman held a meeting on Wednesday. Oli had reached Khumaltar to meet Dahal this afternoon. Dahal became the prime minister for the third time with the support of UML Chairman Oli. Though Dahal became the prime minister, they are yet to make a decision on the distribution of many important posts. The UML will get the post of President and Speaker. The Maoist Center, who got the post of prime minister, will get the post of Vice-President and Rastriya Swatantra Party will get Deputy Speaker. This is the first time that Oli reached Khumaltar today after the alliance of UML-Maoist Center. Preparations are also underway to rope in Madhav Kumar Nepal-led CPN (Unified Socialist) in the ruling coalition.

In a much-needed respite to the banks and financial institutions (BFIs) stricken by a deeper liquidity crunch, the government has allowed banks to consider the majority of reserves funds of local government as bank deposits till the end of the current fiscal year. In December last year, the government decided to allow the commercial banks to count up to 80 percent of the reserve funds of the local governments deposited in commercial banks as deposits till the end of the last fiscal year 2021/22. Earlier, only 50 percent of such funds could be counted as deposits. In September this year, the deadline for counting such funds as deposits was extended further till mid-January 2023. The measure helped commercial banks to keep their credit-to-deposit (CD) ratio to the regulatory limit of 90 percent. With the banking sector continuing to face a shortage of loanable funds which resulted in surging interest rates in recent months, the government decided to extend the deadline further till the end of the current fiscal year. “The Ministry of Finance made such a decision early this week,” a senior official of Nepal Rastra Bank said. “This is expected to help the banks from getting their liquidity further.” The monetary arrangement, which allows banks to consider the reserve funds of the local governments as deposits, has helped banks to count the funds of local governments of over Rs 100bn as liquidity, according to the central bank. The non-extension of the deadline would have caused havoc in the liquidity position of banks by the middle of January next year when people are likely to withdraw a large chunk of money from the banks and financial institutions to pay the first installment of income tax. As per the Income Tax Act, taxpayers are required to pay income tax in three installments in January, April, and July. As a result of the excessive lending in the early months of last fiscal year, the banking sector faced a liquidity crunch as deposits could not grow in proportion to the lending. According to the central bank, there has been some improvement in liquidity in the last few months as the CD ratio has come down to around 86 percent. BFIs have hardly issued new loans while there has been a marked improvement in deposit collection due to an increased inflow of remittances as well as increasing government spending. NRB data show that nearly Rs 100bn has been collected by banks as deposits since the start of the second quarter of this fiscal year while the banks and financial institutions have lent around just Rs 3bn. “The latest trend of deposit and lending has helped to bridge the gap created by higher lending and lower deposit collection in the past,” the NRB official said. The liquidity is expected to be eased relatively in the second half of the current fiscal year provided the remittance inflows continue to increase and government spending also picks up. The government’s capital spending also usually increases in the second half of the fiscal year which will help bring cash into the banking system easing the liquidity crunch. As of December 26, capital expenditure is just over 10 percent, according to the Financial Comptroller General Office. “As development activities will pick up in the second half of fiscal, there will be a rise in capital expenditure which will help improve the liquidity situation of the banking sector,” the NRB official said.