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The government is rapidly raising internal debt, taking advantage of sufficient liquidity in the banking system. 

Nepal Rastra Bank (NRB) is also raising debt, originally slated for the second quarter, now as it would reduce the cost for the government and also help manage liquidity to some extent.

The government has set a target of raising Rs 240bn internal domestic debt in the current fiscal year. Out of this amount, the central bank has already secured Rs 87.31bn. This includes Rs 35bn that the central bank had initially planned to raise in the second quarter, according to the Monetary Management Department of the NRB. Of the Rs 87.31bn raised from the market so far, Rs 5bn was collected via treasury bills, with the remaining Rs 82.41bn through development bonds.

The weighted interest rate of treasury bills stands at six percent, and domestic bonds at seven percent, according to the department. Central bank officials say that they decided to raise funds targeted for the coming quarters in the first quarter to take advantage of the easy liquidity situation and low cost of funds and also to manage the banking system, which is flush with liquidity.

Banks have around Rs 500bn in investable funds. Banks have total deposits of Rs 5,823bn and total loans of Rs 4,838bn. They added Rs 35bn in deposits and invested Rs 54bn in the first two and a half months of the fiscal year, ending in September. In the same period of the previous fiscal year, banks had seen deposits fall by Rs 36bn while their loan flow had gone up by Rs 24bn.

The central bank plans to raise Rs 55bn each in the first and second quarters, Rs 53bn in the third quarter, and Rs 77bn in the fourth quarter. As per the schedule, it has already raised Rs 55bn that it had intended to raise in the first quarter. Going further, it has raised about Rs 34bn out of the Rs 55bn, which it had scheduled to raise in the second quarter, in the first quarter itself.

Banks, which were already in a comfortable liquidity situation, are further flush with lendable funds after the government allowed them to count 60 percent of funds of local units parked in them as deposits. Because of this, the inter-bank lending rate has come down to around two percent compared to six percent in the past.

The central bank, which used to absorb liquidity in the past through tools like reverse repo when interbank rates fell below 4.5 percent, hasn’t been able to implement such tools yet. This is because the interbank rates have come down due to the government’s decision to send additional funds into the banking system by allowing banks to count local government’s funds parked in them as deposits. We are in a wait and watch situation regarding our next move, an official at the department said.

The government, meanwhile, has failed to expedite its spending. According to the Office of Financial Comptroller General, the government has expended only 11.77 percent of its total budget allocated for the current fiscal year in the first two and a half months (between July 16 and Oct 8). The progress in capital budget expenditure remains at a disappointing 3.78 percent, while recurrent expenditure stands at 13.78 percent.

The price of gold has increased by Rs 1,000 per tola in the domestic market on Monday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 108, 600 per tola today. It was traded at Rs 107, 600 per tola on Friday.

Meanwhile, tejabi gold is being traded at Rs 108, 100 per tola. It was traded at Rs 107, 100 per tola.

Similarly, the price of silver has increased by Rs 35 per tola and is being traded at Rs 1,345 per tola today. 

Tourists' mobility has visibly increased in Thamel – the main tourism hub – with the advent of autumn season. Tourism entrepreneurs are being elated with the rise in arrival of tourists.

The entrepreneurs have come across financial trouble with a sharp fall in the inflow of tourists in the wake of the devastating Gorkha earthquake, trade embargo and coronavirus pandemic.

A new hope is simmering among the entrepreneurs with the gradual rise in the arrivals of tourists at the onset of tourism season.

Influx of foreign tourists has increased in Thamel of late, said Thamel-based restaurant operator Bhagawan Thapa, who has been offering Thakali cuisine varieties.

"In earlier months, hardly 10-15 domestic and foreign guests used to visit my restaurant daily for eateries. But the number has increased to 45-50 this month and most of them are foreigners", he shared.

Kiran Dev Ghimire, who has been operating a stationery shop in Thamel for the past one-and-a-half decade, said inflow of foreign tourists has increased in Thamel lately.

However, tourists have been facing trouble in lack of proper maintenance of dilapidated roads in Thamel which has established its international fame, he mentioned.

Fancy cloth operator Sitaram Regmi commented that business volume has not increased in Thamel despite a rise in tourism activities. "Fancy business transactions have dropped in Thamel this year compared to last year".

Hotel business has a different story in Thamel. The occupancies in Thamel-based hotels have increased with a rising flow of tourists.

Mahesh Phuyal, operator of Thamel-based four-star hotel Ramada Encore, said hotel rooms have been booked for the autumn season since a month before.

Sahadev Dhamala, proprietor of a hotel in Thamel, however said tourism business in Thamel has not been as anticipated due to short-term stay of tourists of late.

Dhamala, also the vice-chairperson of Thamel Tourism Development Council, said the Council has been holding discussions with different agencies on the measures to prolong the stay of foreign tourists in Thamel.

According to Nepal Tourism Board, a total of 692,372 tourists have entered Nepal via air routes in the first nine months of the year 2023. Among them, 91,012 tourists arrived in Nepal in the month of September alone.

The Nepal Stock Exchange (NEPSE) plunged by 35. 67 points to close at 1,921.24 points on Sunday.

Similarly, the sensitive index dropped by 5. 79 points to close at 367. 57 points.

A total of 5,815,189-unit shares of 289 companies were traded for Rs 1. 80 billion.

Meanwhile, Barahi Hydropower Public Limited was the top gainer today with its price surging by 9. 59 percent. Likewise, Himalayan Laghubitta Bittiya Sanstha Limited and Garima Debenture, 2085 were the top losers as their price fell by 10. 00 percent.

At the end of the day, the total market capitalization stood at Rs 2. 93 trillion