The NEPSE Journal
Market commentary, data deep-dives, and trading notes from the NEPSE Trading desk.
NRB’s 42.8% surge in gold reserves highlights a prudent shift toward reserve diversification and financial security. This move strengthens Nepal’s external balance sheet, enhances its resilience to global volatility, and positions the country more securely against future economic shocks.
NRB’s foreign assets surge is a positive sign for external stability but highlights an internal liquidity crunch that policymakers must urgently address. Balancing foreign wealth with domestic credit flow will be key to maintaining economic growth in the fiscal year 2025/26.
Nepal’s broad money (M3) reached Rs. 7.87 trillion, growing 12.4% year-on-year. Strong remittance inflows and expanding foreign reserves remain the main drivers of liquidity growth, even as time deposits and credit demand show mixed trends.
Government deposits jumped 17.7% to Rs. 226.6B, while net claims on government fell 6.6%, showing stronger fiscal savings but potentially tighter liquidity conditions in Nepal’s economy.
Foreign liabilities decreased by Rs. 12.8 billion (−7.3%) in 2025/26, easing Nepal’s external debt pressure and contributing to stronger foreign reserves and currency stability.
Private sector credit rose by Rs. 400 billion (7.7%) in August 2025 — signaling renewed business activity, but raising questions about the quality and direction of credit growth.
M1+ growth of 32.8% in August 2025 reflects rising liquidity led by savings and call deposits, but the sustainability of this growth depends on how effectively the liquidity is used to stimulate Nepal’s productive economy.
Broad Money (M2) grew 12.5% year-on-year in August 2025, signaling strong liquidity expansion supported by higher savings and deposits, but time deposits declined.
