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The price of gold has dropped by Rs 1, 400 per tola in the domestic market on Tuesday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow metal is being traded at Rs 238, 300 per tola today.  It was traded at Rs 239, 700 per tola on Monday.

Similarly, the silver is being traded at Rs 3, 015 per tola.

Ministers for Economic Affairs from all seven provinces have jointly called on the federal government to increase fiscal equalization grants in line with the growth of the federal budget and to make the grant distribution process more transparent, predictable, and stable throughout the fiscal year.

Issuing a ‘Hetauda Declaration’ after a national workshop on “Strengthening Fiscal Federalism and Future Directions” in Hetauda, they emphasized that fiscal federalism—the cornerstone of Nepal’s federal structure—cannot function effectively unless provinces receive timely and adequate financial transfers from the federal government. They said that inconsistencies in grant allocation and mid-year cuts have hampered provincial planning and implementation of development projects.

The declaration was signed by Minister for Economic Affairs of Koshi Province Ram Bahadur Magar; Chief Minister and Minister for Economic Affairs of Madhesh Province Jitendra Sonal; Minister for Economic Affairs and Planning of Bagmati Province Prabhat Tamang; Minister for Economic Affairs of Gandaki Province Dr. Takaraj Gurung; Minister for Economic Affairs of Lumbini Province Dhanendra Karki; Minister for Economic Affairs of Karnali Province Rajiv Bikram Shah; and Minister for Economic Affairs of Sudurpaschim Province Bahadur Singh Thapa.

“The federal government’s annual budget has grown steadily, but fiscal equalization grants to provinces have not kept pace,” the ministers said. “We urge the federal government to increase the grant proportionally, ensure transparency in allocation, and refrain from reducing any form of grants during the fiscal year.”

The gathering discussed the financial challenges faced by provinces, including delayed budget disbursement, limited revenue authority, and frequent changes in grant formulas. The provincial economic affair ministers added that unpredictable grant flows were disrupting essential service delivery, delaying capital expenditure, and weakening local fiscal discipline.

The ministers also raised concerns about the lack of clarity in intergovernmental fiscal transfers and the need for better coordination between federal, provincial, and local governments. They stressed that fiscal equalization grants should be distributed based on clear, evidence-based criteria that reflect population size, development needs, and geographic disparities.

The meeting also called for reforming the existing fiscal transfer system to strengthen fiscal autonomy at the subnational levels. The ministers urged the National Natural Resources and Fiscal Commission (NNRFC) to play a more active role in ensuring equitable resource distribution and monitoring compliance with constitutional principles of fiscal federalism.

The joint gathering concluded with a commitment from all seven provinces to present a unified stance on fiscal decentralization in future discussions with the federal government.

The Nepal Stock Exchange (NEPSE) plunged by 8. 24 points to close at 2, 622. 80 points on Monday.

Similarly, the sensitive index dropped by 0. 83 points to close at 456. 39 points.

A total of 12,185,388-unit shares of 333 companies were traded for Rs 6. 05 billion.

Meanwhile, Muktinath Krishi Company Limited (MKCL) was the top gainer today with its price surging by 9. 99 percent.
Likewise, Eastern Hydropower Limited (EHPL) was the top loser as its price fell by 10. 00 percent.

At the end of the day, the total market capitalization stood at Rs 1. 48 trillion.

The Financial Action Task Force (FATF) has retained Nepal on its Jurisdiction under Increased Monitoring list, commonly known as the gray list, citing persistent strategic deficiencies in the country’s anti-money laundering (AML) and counter ­terrorist financing (CFT) regime.

Issuing a statement after its plenary session last Friday, the global watchdog said while Nepal made a high-level commitment to strengthen its AML/CFT framework earlier this year, the progress has not been sufficient to warrant removal from the gray list. It said Nepal should continue to work on implementing its action plan to address its strategic deficiencies.

After the plenary, the FATF has said that Nepal most improve its understanding of money-laundering and terrorist-financing risks remains limited; enhance supervision of higher-risk sectors such as banks, cooperatives, casinos, real-estate and dealers in precious metals and stones; and demonstrate the identification and sanctioning of materially significant illegal hundi providers without affecting financial inclusion.

Additionally, Nepal has been told to increase capacity and co-ordination of competent authorities to conduct money laundering investigations; demonstrate an increase in such investigations and prosecutions; demonstrating measures to identify, trace, restrain, seize, and, where applicable, confiscate proceeds and instrumentalities of crime in line with the risk profile; and address technical compliance deficiencies in its targeted financial sanctions regime for terrorism financing and proliferation financing.

Nepal had previously exited the gray list back in 2014 after a roadmap of reforms was implemented. Earlier in February, the government had signaled strong political commitment to bolster its AML/CFT systems. Despite some legislative progress, implementation has remained uneven and structural reform has lagged. In particular, Nepal's regulatory oversight of non-financial businesses, beneficial-ownership transparency and enforcement action remain deficient.

About three years ago, the Asia Pacific Group on Money Laundering (APG) conducted a Mutual Evaluation Report on Nepal’s system for preventing money laundering and terrorist financing, and submitted its findings to the Financial Action Task Force (FATF).

The APG’s annual plenary meeting, held in Vancouver, Canada, from 9-14 July 2023, endorsed Nepal’s mutual evaluation report. Based on that assessment, the FATF in Oct 2023 placed Nepal under a one-year observation period. During the assessment, it  identified 40 areas for improvement.

Nepal was expected to implement the FATF’s recommendations and demonstrate progress sufficient to avoid being placed on the gray list during this period. However, the country failed to make significant improvements within the one-year timeframe, leading to its eventual placement on the gray list.

Although being on the FATF’s gray list does not automatically impose sanctions, it acts as a red flag to the international financial community. Banks, foreign investors and correspondent-banks tend to apply heightened due diligence when dealing with entities in gray-listed jurisdictions. 

Building trust through strong anti-money laundering and countering the financing of terrorism frameworks will be critical for Nepal as it seeks to maintain international financial credibility and attract foreign capital.