The NEPSE Journal
Market commentary, data deep-dives, and trading notes from the NEPSE Trading desk.
Financial institutions’ liquid funds declined by Rs. 33.3 billion (−4.4%) in August 2025, driven mainly by lower balances with NRB (−14.8%) and reduced cash in hand. Rising foreign placements partially offset domestic liquidity pressures.
Savings deposits rose slightly by Rs. 32.3 billion (1.2%) in mid-August 2025, reaching Rs. 2.70 trillion. Residential accounts continue to dominate, reflecting stable household saving behavior despite tightening liquidity and lower fixed deposit rates.
Private sector credit crossed Rs. 5.6 trillion in mid-August 2025, rising slightly by Rs. 12.5 billion. Corporate lending dominates, but growing interest accruals point to rising repayment stress in Nepal’s financial system.
Overall, the data indicates that Nepal’s banking sector is entering a phase of cautious consolidation — building stronger reserves while managing growing obligations — a sign of greater financial discipline but also of heightened systemic caution.
Overall, the data suggests a gradual rebalancing within Nepal’s deposit market: long-term savings are slightly weakening, while short-term liquidity preferences are gaining traction — a pattern often seen during transitional economic phases.
NRB’s latest data shows that while Nepal’s banking deposits have temporarily contracted, the internal structure of deposits is shifting toward savings and institutional accounts — a sign of cautious but adaptive financial behavior.
NRB’s 2025 report shows a robust rise in reserves and assets, improved government deposits, and controlled money supply — highlighting a cautiously optimistic path toward monetary stability and financial strength for Nepal.
NRB’s 6.8% rise in capital and reserves marks a healthy financial strengthening — a sign that Nepal’s central bank continues to build resilience while balancing monetary tightening, inflation control, and external sector management.
NRB’s liabilities growing by nearly one-third in a year marks a significant shift in Nepal’s monetary dynamics — one that reinforces external strength but also adds complexity to managing domestic liquidity and inflation expectations.
In essence, while the surge in deposit auction volumes reinforces Nepal’s financial stability, it also points to a deeper structural concern: money is staying inside the banking system rather than flowing into the real economy.