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The International Monetary Fund (IMF) has decided to release Rs 6.9bn (about $52.8m) to Nepal in the second tranche of the Extended Credit Facility (ECF). After completing the first and second reviews of Nepal’s performance, the executive board of IMF agreed to provide the second installment of the loan. In the last week of February, the Nepal government and IMF reached a staff-level agreement on policies and reforms needed to complete the combined first and second review of the ECF arrangement. Nepal was expecting to receive the second installment in May 2022, but the Washington DC-based global lender delayed the second tranche of $ 395.9m in loan to Nepal till February 2023, stating that the country is yet to fulfill the obligations. The IMF had approved the $395.9m ECF for Nepal in January 2022 of which the Himalayan nation had already received the first installment of $110m. The funding was approved to assist Nepal’s Covid-19 response in mitigating the pandemic’s impact on health and economic activity, protect vulnerable groups, preserve macroeconomic and financial stability, and support sustained growth and poverty reduction. Issuing a press statement, the IMF said that the ECF arrangement had helped mitigate the impact of the pandemic and global shocks on economic activity and aims at protecting vulnerable groups, preserving macroeconomic and financial stability, and supporting sustained growth and poverty reduction. “The program is also helping to catalyze additional financing from Nepal’s development partners,” the statement reads. Even though the import restrictions helped to stabilize the declining foreign exchanges, the measures contributed to the reduction of the government’s revenue sharply in the current fiscal year forcing the government to cut funding for various development projects. The IMF praised Nepal for making continued progress with the implementation of the ECF-supported program despite a challenging global and domestic environment last year, including the impact of Russia’s war in Ukraine. “The Nepali authorities have taken decisive actions to maintain a stable macroeconomic environment in the context of the post-Covid-19 recovery and global shocks. The much-needed monetary policy tightening last year, together with the gradual unwinding of covid support measures, helped moderate credit growth and lower inflation,” the IMF said. “While reform implementation has been slower than expected, in a difficult environment, the Nepali authorities remain committed to their economic reform program,” the statement quoted Bo Li, Deputy Managing Director and Acting Chair of IMF as saying. “Maintaining momentum on governance reforms is critical to cement recent gains in fiscal transparency,” said Bo. “Fiscal consolidation and further structural reforms are needed to support medium-term fiscal sustainability. Revenue mobilization, advancing fiscal federalism, addressing fiscal risks, and strengthening public investment management are important measures.” The IMF has also pointed out the asset quality of the Nepali financial system. Bank asset quality, according to the IMF, has deteriorated as higher lending rates depress borrowers’ repayment capacity. In fact, Nepal has committed to evaluating the situation of Nepal’s large 10 banks through external auditors to receive the ECF funding. A Nepal Rastra Bank (NRB) official had earlier told the Annapurna Express that Nepal Rastra Bank would foreign auditors to identify the exact status of 10 commercial banks following the completion of the latest first and second review of the ECF-supported program. “The NRB is prioritizing the asset quality of banks, including through regulatory initiatives to ensure appropriate classification of loans, and is focused on advancing the financial sector reform agenda,” the IMF said. “Measures to improve the autonomy and accountability framework of the central bank and strengthen the AML/CFT framework and its effectiveness remain crucial.”

The price of gold has increased by Rs 1, 800 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 110, 600 per tola today. The gold was traded at Rs 108, 800 per tola on Tuesday. Meanwhile, tejabi gold is being traded at Rs 110, 050 per tola. Similarly, the silver is being traded at Rs 1,425 per tola today.

The Nepal Stock Exchange (NEPSE) plunged by 4. 27 points to close at 1,866.40 points on Tuesday. Similarly, the sensitive index dropped by 1. 12 points to close at 357. 02 points. A total of 2,336,625-unit shares of 271 companies were traded for Rs 692 billion. Meanwhile, Aatmanirbhar Labhubitta Bittiya Sanstha Limited was the top gainer today with its price surging by 8. 20 percent. Likewise, Swet-Ganga Hydropwer and Construction Limited was the top loser with its price dropped by 4. 70 percent. At the end of the day, the total market capitalization stood at Rs 2. 71 trillion.

The Securities Board of Nepal (Sebon) has issued Letters of Intent (LOIs) for the license of securities traders (securities brokers and securities dealers) to 16 brokerage firms. According to Sebon Spokesperson Muktinath Shrestha, 16 of the 45 companies that applied for the license were issued LoIs as decided by the Sebon board meeting on Monday. “The board issued LoI to 16 firms after the completion of the evaluation of their applications,” said Shrestha. The firms that have received the LOI will get the license after they ready their infrastructure as prescribed by the Sebon. The board has issued LoI to subsidiary companies of seven commercial banks - Nabil Bank, Nepal Investment Mega Bank, Citizens Bank, Kumari Bank, NMB Bank, Rastriya Banijya Bank and Sanima Bank to operate stock brokerage transactions. Among them, Nabil Bank has received an LOI in the name of Nabil Securities Limited to work as a securities dealer. Similarly, Himalayan Brokerage Company, Index Securities, Sun Securities, Capital Max Securities, Bhole Ganesh Securities, Infinity Securities, Akash Bhairav Securities, SPSS Securities and Elite Stock House have also been issued LoI for brokerage transactions. This is the first time in over a decade that Sebon is going to issue stock broking licenses. Meanwhile, Sebon has formed an evaluation committee for the issuance of licenses for commodities exchanges. The five-member committee is headed by Phanindra Gautam, Joint Secretary at Ministry of Law, Justice, and Parliamentary Affairs and has Ritesh Kumar Shakya, Joint Secretary at Ministry of Finance, Mukunda Kumar Chhetri, Executive Director at Nepal Rastra Bank, Muktinath Shrestha, Executive Director at Sebon, and Deepa Dahal, Deputy Executive Director at Sebon as members. Sebon is preparing to evaluate the applications of four companies for commodities exchange licenses. Nepal Multi Commodities Exchange, Himalayan Commodities and Derivative Exchange, Multi Derivative Exchange, and Multi Assets and Derivative Exchange have applied for the license. Sebon plans to issue licenses for two commodities exchanges.