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The price of gold has dropped by Rs 200 per tola in the domestic market on Tuesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 108, 800 per tola today. The yellow metal was traded at Rs 109, 000 per tola on Monday. Meanwhile, tejabi gold is being traded at Rs 108, 300 per tola. It was traded at Rs 108, 500. Similarly, the silver is being traded at Rs 1,405 per tola today.

The Securities Board of Nepal (Sebon) has formed an evaluation committee for the issuance of licenses for a new stock exchange and commodities exchanges. The five-member committee is headed by Phanindra Gautam, Joint Secretary at the Ministry of Law, Justice, and Parliamentary Affairs and has Ritesh Kumar Shakya, Joint Secretary at Ministry of Finance, Mukunda Kumar Chhetri, Executive Director at Nepal Rastra Bank, Muktinath Shrestha, Executive Director at Sebon, and Ambika Giri, Deputy Executive Director at Sebon as members. The Gautam-led committee will study the applications submitted by the companies for new stock exchange and commodities exchanges and recommend the names to the board. Sebon plans to complete the process of license issuance for a new stock exchange and commodities exchanges within a month. The board has received applications from three companies for a new stock exchange and four companies for two commodities exchanges. The top corporate groups of the country are in a race to get the license to operate a new stock exchange. Himalayan Stock Exchange, National Stock Exchange, and Annapurna Stock Exchange have applied for the license to start a new stock exchange. Making a second amendment to the Securities Market Operation Regulation, 2064 BS in the second week of September 2022, Sebon initiated the process to establish the second stock exchange in the country. On September 18, 2022, Sebon invited applications for a new stock exchange, commodity exchanges, and stock brokerage firms. However, the process stalled for five months after advocate Deepak Bikram Mishra went to the Supreme Court demanding to stop the licensing process. The licensing process was stalled after the apex court dismissed Mishra's writ petition on October 21, 2022. Following the court's verdict, the Sebon on April 13 again invited applications from interested parties for new stock exchange and commodities exchanges. According to Sebon, the new stock exchange should have a paid-up capital of Rs 3 billion, of which 70 percent will be institutional investments.  

The price of gold has dropped by Rs 200 per tola in the domestic market on Monday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 109, 000 per tola today. The yellow metal was traded at Rs 109, 200 per tola on Wednesday. Meanwhile, tejabi gold is being traded at Rs 108, 500 per tola. It was traded at Rs 108, 700. Similarly, the silver is being traded at Rs 1,415 per tola today.

It’s official. Nepal’s economy is going through a deep recession. According to the National Statistics Office (NSO), the country’s economic growth has turned negative in the second quarter of the current fiscal year. In its economic growth projection for the second quarter, NSO said the gross domestic product (GDP) growth has been negative by 1.1 percent. GDP growth has suffered this fiscal largely due to tight monetary policy, slackened domestic demand, the unwinding of the Covid-19 stimulus, and persistent global headwinds.  

With the sharp slowdown in economic activities and higher interest rates, the country’s economy has been under pressure from the start of FY 2022/23. The economy grew by a meager 1.7 percent in the first quarter of the current fiscal year. The last time when the country’s GDP turned negative was in the second quarter of FY 2020/21 when the economy was reeling under the Covid-19 pandemic. This year, the slump in the construction, mining, transport, and manufacturing sectors, and wholesale and retail trade dragged down the overall economic growth.

The NSO report shows the mining sector grew by negative 16.4 percent while the construction sector is negative by 20.6 percent. Similarly, the wholesale and retail trade’s growth turned negative by 9.7 percent while the manufacturing sector is also negative by 4.3 percent.

According to NSO, the growth of the manufacturing sector is likely to decelerate further due to higher interest rates, import restriction measures, and the slowdown in domestic consumption. A dampened external demand has affected manufacturing and construction subsectors. The mining and construction sector has been going through a prolonged slump due to a sharp decline in the demand for cement, steel, and other construction materials. The demand for cement, steel, sand, and other construction materials has decreased with construction activities in the country coming to a halt.

The decline in public construction and the downturn in private house construction have resulted in a decrease in the consumption of construction materials.   The import restrictions and falling market demands have hit the wholesale and retail trade. Credit control measures and a hike in interest rates have slowed down real estate, wholesale, and retail trade activities. Experts say a negative economic growth rate indicates a grinding halt in economic activities.

Economist Chandra Mani Adhikari said the slowdown in economic activities has impacted the country's economic growth. “The government has not been able to pay more than Rs 60bn to the contractors,” said Adhikari, “This has affected the cash flow not only in the construction sector but also in industries like cement, steel, and other construction materials.”

According to Adhikari, the disruption in the cash flow has made it difficult for businesses even to repay the loans of the banks.  The only silver lining is, the growth of the hotel and restaurant services sector has increased by 20.4 percent in the second quarter of this fiscal year compared to a growth of 2.2 percent in the second quarter of last fiscal year. 

The NSO report is in line with the growth estimates of the World Bank (WB) and Asian Development Bank (ADB). Both WB and ADB have projected that Nepal's economic growth would grow at 4.1 percent this year.