The NEPSE Journal
Market commentary, data deep-dives, and trading notes from the NEPSE Trading desk.
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.
The government’s deposits at NRB have grown significantly, improving short-term fiscal stability but raising questions about the effectiveness of spending capacity. The trend signals better financial strength but also reflects persisting weaknesses in capital expenditure management.
Nepal’s reserve money grew by nearly 14%, largely fueled by cash in circulation and rising bank reserves at NRB. This signals improved liquidity conditions, but it also highlights risks of inflation and the country’s slow progress in reducing cash dependency.
government claims on NRB shrinking by 40.9% shows a deliberate shift away from direct central bank borrowing. The trend may improve monetary discipline but could raise future interest costs as borrowing shifts to commercial markets.
Nepal’s foreign reserves crossing Rs. 2.5 trillion is a historic achievement, reflecting the strength of remittance inflows and prudent reserve management by NRB. However, policymakers face the challenge of turning this external buffer into sustainable domestic growth.