Nepal’s Financial Derivatives Improve Slightly: USD +1.4M in 2025/26

Nepal’s Balance of Payments (BoP) report for the first month of FY 2025/26 indicates a minor but notable positive swing in financial derivatives and employee stock options, with the sector recording a net inflow of USD +1.4 million.

According to the Nepal Rastra Bank (NRB), the financial-derivatives segment moved from a small negative balance of USD −0.2 million in 2024/25 to a net gain this year. This improvement, though modest in absolute terms, highlights Nepal’s increasing exposure to global financial-market instruments such as forward contracts, options, and hedging tools used by banks and large corporates.

Economists suggest the gain reflects better risk-management strategies adopted by commercial banks and a cautious appreciation in reserve-related derivative positions as foreign-exchange conditions stabilize. It may also point to the growing use of derivatives to hedge against exchange-rate volatility and interest-rate risks in the global market.

While the figure remains small compared to the overall financial-account surplus of over USD 577 million, analysts say it is an early signal that Nepal’s financial institutions are starting to participate in modern financial instruments under NRB’s gradual liberalization framework.