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The gold is being traded at Rs 111, 600 per tola in the domestic market on Thursday. According to the Federation of Nepal Gold and Silver Dealers’ Association, tejabi gold is being traded at Rs 111, 050 per tola. Similarly, the price of silver has dropped by Rs 15 and is being traded at Rs 1,430 per tola today.

The Nepal Stock Exchange (NEPSE) plunged by 2. 43 points to close at 1,841.93 points on Wednesday. Similarly, the sensitive index dropped by 0. 45 points to close at 353. 80 points. A total of 1,942,626-unit shares of 265 companies were traded for Rs 589 billion. Meanwhile, Himal Dolakha Hydropower Company Limited was the top gainer today with its price surging by 8. 24 percent. Likewise, NCC Debenture was the top loser with its price dropping by 5. 44 percent. At the end of the day, the total market capitalization stood at Rs 7. 24 trillion.

In what can be seen as a measure to offer some relief to the borrowers affected by the persistently high-interest rates, the Nepal Rastra Bank (NRB) has allowed the banks and financial institutions (BFIs) to make changes to the lending rates on a monthly basis. Issuing a new circular on Monday, NRB said that BFIs can change interest rates on loans every month from now on abolishing the arrangement that required BFIs to change lending rates only once a quarter. While BFIs have been allowed to make changes in deposit interest rates every month, they had to wait till the end of the quarter regarding the lending rates. "While changing the interest rate of the loan, it should be changed monthly up to the limit of the increase or decrease in the average base rate of the last three months," reads the NRB circular. According to NRB, BFIs can change the loan interest rate for the month of Jestha (mid-May to mid-June), based on the change in the average base rate of the months of Falgun, Chaitra, and Baisakh. Bankers have said that lending rates will decrease from Jestha. Commercial banks have reduced the fixed deposit interest rate from 11 percent to 9.99 percent in Baisakh (mid-April to mid-May). The interest rate of institutional fixed deposits has also been reduced from 9 percent to 7.99 percent. Savings account interest rates have also been reduced. However, lending rates have remained unchanged due to the previous arrangement of NRB. With the central bank introducing a new provision, the deck has been cleared for the BFIs to change the loan interest rate from Jestha. Everest Bank CEO Sudesh Khaling said that banks would reduce the loan interest rates starting from mid-May. "We have already reduced the deposit interest rate in Baisakh but due to the obligation to calculate the base rate on a quarterly basis, we had to wait until July to reduce the lending rates," he said. "After the central bank came up with the new arrangement, lending rates will decrease from mid-May." When BFIs hike the interest rate on deposits, their cost of funds also increases, pushing the base rate to go up. Currently, the base rate is the main tool to determine the lending rate in Nepal. Banks have been determining the lending rate by adding a premium to the base rate. Banks started reducing interest rates on deposits in mid-January. As their cost of funds decreased, the base rate also decreased accordingly. According to the latest decision of the Nepal Bankers' Association, banks can determine the interest rate by adding a maximum of 5 percent premium to the base rate. Bankers say that the demand for loans has been subdued due to higher interest rates. With the base rate starting to decline, borrowers can get loans at cheaper interest rates in the coming days. According to Everest Bank CEO Khaling, the new provision will benefit customers more than the banks.  

The acute shortage of liquidity, rising interest rates, and declining demand have badly affected the operational efficiency of industries in Bagmati Province. As industries grapple with multiple issues, their capacity utilization grew marginally in the first half of the current fiscal year. According to the latest report of the Nepal Rastra Bank (NRB), the average capacity utilization of industries in Bagmati Province stood at 47 percent in the first half of FY 2022/23 compared to 45.6 percent during the same period of the last fiscal. The report titled "Provincial Economic Activities Report-Bagmati Province", states capacity utilization of the noodles industry was highest at 95.02 percent while it was lowest for the ointment industry at 6.58 percent. In the review period, the production of the processed milk industry grew by 18.6 percent, soft drink industry by 7.3 percent, cigarette industry by 6.7 percent, pashmina industry by 10.5 percent, garment industry by 8.1 percent, tablet industry by 83.5 percent, and dry syrup industry by 4.9 percent. However, the production of animal feed declined by 3 percent, noodles by 4.5 percent, beer by 13 percent, paint by 23.5 percent, capsules by 27.8 percent, ointment by 34.9 percent, soap by 20.1 percent, and cement by 9.1 percent, according to the report. Meanwhile, the disbursement of loans by banks and financial institutions (BFIs) to the industrial sector also dipped in the first half of FY 2022/23. The BFIs' loan disbursement to industries decreased by 7.2 percent to Rs 902.87 billion in the first half of the current fiscal year compared to a growth of 24.3 percent during the corresponding period of FY 2021/22. In the first six months of the last fiscal year, BFIs disbursed a total of Rs 973.12 million to the industrial sector. According to the report, of the total loans, Kathmandu district has the highest share of 87.7 percent. The BFIs disbursed Rs 791.38 billion in loans to the industries in Kathmandu while Sindhupalchowk district has the lowest share of 0.1 percent (Rs 630 million). In the review period, the BFIs' loans to mining industries surged by 178.3 percent, the electricity sector by 16.3 percent, and the agriculture sector by 13 percent. However, loan disbursement to the construction sector fell by 51.5 percent. Though the Bagmati Province accounts for the largest share of the country's real estate business, the number of real estate registration decreased by 57.3 percent in the current fiscal year. The revenue collection from realty transactions also plunged by 64.1 percent to Rs 5.66 billion in the first half of this fiscal. Such revenue increased by 115.3 percent during the same period last year.