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The Nepal Stock Exchange (NEPSE) plunged by 41. 04 points to close at 2,149.39 points on Monday. Similarly, the sensitive index dropped by 7. 89 points to close at 411. 25 points. A total of 14,482,959 unit shares of 252 companies were traded for Rs 5. 47 billion. Meanwhile, Kumari Dhanabriddhi Yojana was the top gainer today with its price surging by 10. 02 percent. Similarly, Gurans Laghubitta Bittiya Sanstha Limited was the top loser with its price dropped by 9. 18 percent. At the end of the day, the total market capitalization stood at Rs 3. 10 trillion.

The Nepal Airlines Corporation (NAC) has resumed its flights to Ilam after a year-long gap. An agreement was inked between the NAC and Ilam Municipality to make a flight to Ilam in a week. Following the agreement, an NAC aircraft made a flight to Phalgunanda Sukilumba Airport from Kathmandu this morning. Tara Air had made some flights to Phalgunanda Sukilumba Airport for three months last year but no flights were made since then. Mayor of Ilam Municipality Kedar Thapa said that the NAC aircraft will return to Kathmandu after its Kathmandu-Ilam flight today. With the resumption of flights, we hope better touristic activities in Ilam, Mayor Thapa said. The NAC will run 19-seater Twin Otter and the one-way plane fare from Ilam to Kathmandu has been fixed at Rs 6,300 while the fare is Rs 6,500 from Kathmandu to Ilam. However, the municipality said that senior citizens, students and children have been provided with special subsidies in the fare. Passengers from Ilam, Panchthar, Taplejung and neighboring Darjeeling of India would also be benefited after the flights.  

Commercial banks will reduce interest rates on deposits effective from Magh (mid-January). With liquidity in the banking sector easing, bankers have decided to reduce interest rates on deposits by 10 percentage points. A meeting of the Nepal Bankers' Association (NBA), the association of commercial bank CEOs, on Wednesday decided to reduce the deposit interest rate effective from mid-January. According to this decision, the interest rate for individual fixed deposits for the month of Magh (mid-January to mid-February) will come down to 11 percent from 12.13 percent currently. Similarly, the interest on institutional fixed deposits has also been set at 9 percent from 10.13 percent. The new NBA President Sunil KC said the decision to reduce the interest rate was made according to the guidelines of the Nepal Rastra Bank (NRB). As per NRB's guidelines, banks and financial institutions can reduce the interest rate up to 10 percent. KC, who is the CEO of NMB Bank, was elected for the post of President of the NBA by a special general meeting held on Wednesday after the tenure of Agricultural Development Bank CEO Anil Upadhyaya ended. NBA's decision to slash interest rates came after improvements in deposits in Poush, and the credit-to-deposit (CD) ratio of commercial banks coming down to 86 percent. However, the interest rates on loans will be reduced only from mid-February or mid-March. NBA sources said the bankers decided to reduce interest rates following a request from Finance Minister Bishnu Poudel and Nepal Rastra Bank Governor Maha Prasad Adhikari. The private sector has been protesting against the higher interest rates, arguing that it has made doing business costly for them. After the formation of the new government, the private sector held a series of meetings with the Prime Minister, Finance Minister and NRB Governor where they demanded two things - reduction in interest rates and postponement of guidelines on working capital loans. According to NBA, the base rate will also be revised with the change in the rate of deposits. As the interest rates on deposits and lending are correlated, it will certainly affect the interest rates on loans. As per the NRB data, the banks and financial institutions (BFIs) as of Monday collected deposits worth Rs 5311 billion, an addition of Rs 16 billion in the past five days. Similarly, the total extension of loans stands at Rs 4,778 billion. With the improvement in liquidity position, the CD ratio of banks has come down to an average of 86.65 percent while the interbank rate has also fallen to 6.14 percent from around 8 percent. The central bank had tightened the money supply citing that excessive loans were used to import goods which led the country to a deepening trade deficit and fast depletion of foreign exchange reserves. As a result, the base interest rate increased from around seven percent to up to 11 percent in the past year. Since mid-September, banks have increased their interest rates on fixed deposits by 10 percent to 12.13 percent, while the interest rate on savings accounts is 7.13 percent per annum on average. It has triggered the lending rate to go up to 18 percent a year.  

The price of gold has increased by Rs 500 per tola in the domestic market on Friday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 103, 900 per tola today. The gold was traded at Rs 103, 400 per tola on Thursday. Meanwhile, tejabi gold is being traded at Rs 103, 400 per tola. Similarly, the price of silver has dropped by Rs 5 and is being traded at Rs 1,365 per tola today.