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The price of gold has increased by Rs 200 per tola in the domestic market on Wednesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 110, 600 per tola today. It was traded at Rs 110, 400 per tola on Tuesday. Meanwhile, tejabi gold is being traded at Rs 100, 050 per tola. It was traded at Rs 109, 850 per tola. Similarly, the silver is being traded at Rs 1,380 per tola today.

The Nepal Stock Exchange (NEPSE) gained 12. 73 points to close at 2,088.70 points on Tuesday. Similarly, the sensitive index surged by 2.28 points to close at 388. 62 points. A total of 6,450,934-unit shares of 282 companies were traded for Rs 2. 57 billion. Meanwhile, City Hotel Limited was the top gainer today, with its price surging by 9. 98 percent. Similarly, BPW Laghubitta Bittiya Sanstha Limited was the top loser as its price fell by 9.99 percent. At the end of the day, total market capitalization stood at Rs 3. 05 trillion.

After going through a liquidity crunch in the first half of the current fiscal year, the banking system is once again flushed with excess liquidity. With demands for loans drying up, investable capital has been piling up in the banking system in recent days. As of June 29, investable capital worth Rs 357.21 billion has been accumulated in banks and financial institutions (BFIs). The deposits of BFIs amounted to Rs 5,599bn, while loans totaled Rs 4,859bn. As there is no demand for loans currently, the CD ratio of commercial banks has been continuously decreasing. The CD ratio which was 88.07 percent in mid-July, 2022, has fallen to 83.62 percent on June 29, 2023. As per central bank regulatory norms, banks can disburse 90 percent of their deposits in loans. Banks have to maintain the credit-to-deposit ratio (CD ratio) at 90 percent. Bankers say commercial banks are now in a situation to give loans of around Rs 350bn. As the government also spends in the last quarter massively, a large amount of cash is deposited in banks in the period. BFIs generally make little lending during the last quarter of the fiscal year. The BFIs that were experiencing a liquidity crunch until a few months ago are now facing problems of non-disbursement of loans. While liquidity is increasing, bankers say demands for loans have remained low. The credit expansion to the private sector in the first 11 months of the current fiscal year is far less than what the BFIs lent during the same period last fiscal year. According to the data of the Nepal Rastra Bank, the deposits of commercial banks have increased by Rs 386bn in the current fiscal year. However, their lending has grown by Rs 130bn only. According to bankers, the private sector has not sought bank loans with the deepening economic downturn. On the other hand, retail loans such as housing loans and auto loans have not grown with interest rates still remaining high. While the BFIs have been gradually lowering the loan interest rates, the demand for loans has not surged as expected. “The demands for loans have remained subdued due to the state of the economy and businesses,” said Sudesh Khaling, CEO of Everest Bank, “The demand for loans will not increase automatically even if the interest rate is falling. there must be a conducive business environment for that.” Bankers say lending will not grow much in Ashad, the last month of the fiscal year, in which BFIs will be more focused on loan recovery. Bankers say the other reason behind the sluggish lending is banks have become more cautious in loan disbursement due to a sharp rise in non-performing loans (NPLs).

The price of gold has increased by Rs 400 per tola in the domestic market on Tuesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 110, 400 per tola today. It was traded at Rs 110, 000 per tola on Monday. Meanwhile, tejabi gold is being traded at Rs 109, 850 per tola. It was traded at Rs 109, 550 per tola. Similarly, the silver is being traded at Rs 1,375 per tola today.