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The Nepal Stock Exchange (NEPSE) plunged by 41. 16 points to close at 2, 127.37 points on Monday. Similarly, the sensitive index dropped by 7. 33 points to close at 402. 98 points. A total of 8,836,488 unit shares of 256 companies were traded for Rs 3. 30 billion. Meanwhile, Lumbini General Insurance Co. Ltd and Adarsha Laghubitta Bittiya Sanstha Limited were the top gainers today with their price surging by 10. 00 percent. Likewise, United IDI Mardi RB Hydropower Limited was the top loser with its price dropped by 7. 14 percent. At the end of the day, the total market capitalization stood at Rs 3. 06 trillion.

The Nepal Rastra Bank (NRB) has allowed companies operating in Nepal to borrow foreign loans but has barred the investment of such loans in housing, real estate, and the share market. By amending the Foreign Investment and Foreign Loans Management Bylaws 2021, the central bank imposed certain restrictions on investing in foreign loans but has also introduced a number of flexible arrangements to ease the hurdles for firms to borrow money from abroad. According to an amended set of bylaws, no movable or immovable property can be used as collateral or bank guarantee to receive foreign loans except those as determined by the central bank. According to the new arrangement, no third party can be involved in the transaction between foreign lenders and Nepali borrowers. “No third party can receive the loan borrowed by a Nepal-based enterprise,” states the amended Bylaws. As foreign loans should be repaid in foreign currency exchange, the central bank has remained cautious about freely allowing the private sector to take foreign loans. The government and NRB adopted strict import control measures last year due to depleting foreign exchange reserves amid fear of the country heading towards the 'Sri Lanka way'. As a result, the government is struggling to meet its revenue target in the current fiscal year amid the reduced imports. However, NRB has come up with flexible arrangements to allow Nepali borrowers to pay more interest rates for foreign loans. For example, a firm or an industry (other than banks and financial institutions) can now pay an interest rate equivalent to a one-year benchmark interest rate plus six percent per annum while borrowing from foreign banks and financial institutions as well as foreign government entities. Earlier, such a borrower could pay an interest rate equivalent to a one-year benchmark interest rate plus 5.5 percent per annum. While borrowing from non-resident Nepalis (NRNs) abroad, the maximum interest rate that a Nepali firm or individual can pay is a one-year benchmark interest rate plus two percent per annum which was an earlier one-year benchmark interest rate plus 1.5 percent per annum. Similarly, a company with foreign investment operating in Nepal can now borrow up to 100 percent of the paid-up capital from its parent company. Earlier, it was restricted to 60 percent of the paid-up capital. Such companies can also pay an interest rate as high as a one-year benchmark interest rate plus 3.5 percent per annum, up from a one-year benchmark interest rate plus a three percent additional rate per annum earlier. Meanwhile, NRB also allowed foreign investors to record their FDI details at the central bank by mid-January 2024. Likewise, companies bringing foreign loans can also record such borrowings by mid-January 2024. Nepal’s Foreign Investment and Technology Transfer Act has permitted bringing both FDI and foreign loans. The central bank has also been encouraging the private sector to borrow foreign loans under certain criteria. As per the amended Bylaws, foreign investors and borrowers of foreign loans are required to submit applications for keeping their records to the central bank within six months after the foreign exchange enters the country either in the form of investment or loans. “If foreign exchange brought either in the form of investment or loans has not been recorded so far, those bringing the foreign money can now do so within mid-January 2024,” states the Bylaws. Such investments of loans that were brought in the past without the approval of the central bank can now be recorded within the new deadline. According to the NRB, those bringing foreign money need to apply in a prescribed format.  

The price of gold has increased by Rs 300 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 106, 300 per tola today. The gold was traded at Rs 106, 000 per tola on Sunday. Meanwhile, tejabi gold is being traded at Rs 105, 800 per tola. Similarly, the price of silver has remained unchanged and is being traded at Rs 1,365 per tola today.

The Nepal Stock Exchange (NEPSE) plunged by 14. 68 points to close at 2, 168. 53 points on Sunday. Similarly, the sensitive index dropped by 2. 83 points to close at 410. 31 points. A total of 8,276,751 unit shares of 267 companies were traded for Rs 3. 01 billion. Meanwhile, Lumbini General Insurance Co. Ltd and Barahi Hydropower Public Limited were the top gainers today with their price surging by 10. 00 percent. Likewise, Sambriddhi Finance Company Limited was the top loser with its price dropped by 6. 09 percent. At the end of the day, the total market capitalization stood at Rs 3. 12 trillion.