The NEPSE Journal
Market commentary, data deep-dives, and trading notes from the NEPSE Trading desk.
Nepal Rastra Bank’s domestic debt holdings have dropped to Rs. 12 billion, the lowest in recent memory, reflecting tighter fiscal discipline and a move toward market-driven borrowing.
Non-bank institutions added Rs. 19.4 billion in government debt holdings in one month, signaling a healthy diversification of Nepal’s debt market and reduced reliance on banks.
Foreign Employment Bonds remain unchanged at Rs. 330 million, signaling low migrant participation. Despite record remittance inflows, Nepali workers continue to avoid investing in government bonds due to low returns, red tape, and poor outreach.
Despite a rising domestic debt load, Citizen Saving Bonds remain stagnant at Rs. 13.4B, showing weak public interest. Analysts cite low yields, poor outreach, and dominance of banks as key reasons for low retail participation.
Nepal’s debt profile is shifting rapidly — development bonds rose Rs. 40 billion, overtaking treasury bills, which dropped Rs. 27 billion in one month. The trend reflects a government strategy toward longer-term borrowing and reduced rollover risk but could raise long-term fiscal pressure.
Nepal’s domestic debt increased by Rs. 12.9 billion in a month, hitting Rs. 1.27 trillion, as the government leaned on long-term development bonds while cutting back on treasury bills. The shift helps stabilize short-term pressures but highlights ongoing fiscal dependence.
Commercial banks now hold over Rs. 1.02 trillion of Nepal’s domestic debt, highlighting both fiscal dependence and potential private-sector crowding-out risks. While safe for banks, the trend underscores growing pressure on liquidity and market-driven interest rates.
NRB slashed its domestic debt holdings by Rs. 53.8B in mid-Aug 2025/26, signaling a fiscal shift that places the burden of financing on banks and institutions, reducing inflation risks but raising crowding-out concerns.
Nepal’s development bonds rose to Rs. 913.7B in mid-August 2025/26, with commercial banks holding the lion’s share. The shift from T-bills to bonds reduces short-term pressure but raises long-term interest risks.
Nepal’s treasury bills fell Rs. 27.1 billion in mid-August 2025/26, as the government shifted borrowing preference to long-term development bonds, easing short-term refinancing pressure but potentially raising future debt costs.