22/07/2022
Events in FY 2078/79
1. Monetary policy for FY 2078/79 replaces the CCD ratio with the CD ratio.
On August 13th, 2021, the monetary policy for FY 2078/79 was unveiled. It replaced the credit to core-capital plus deposit (CCD) ratio with the credit deposit (CD) ratio. The move reduced the lending capacity of BFIs by several billion rupees. The policy also imposed a limit on margin loans, much to the horror of investors. An individual or firm seeking margin loans can take up to 40 million rupees from one BFI, or 120 million rupees in total, with shares of public companies as collateral.
2. NEPSE records an all-time highest daily turnover and intraday high.
The NEPSE index recorded an all-time highest daily turnover of 21.648 billion rupees on August 15th last year. That same year on August 19th, the NEPSE notched the intraday high of 3227.11.
3. Monetary Policy FY 2078/79 1st Quarter review against investors’ expectations.
On November 26th, 2021, the Q1 review report of the monetary policy for FY 2078/79 was published. Investors were hoping for the scrapping of the limit on margin loans. But their hope was shattered when the NRB showed no interest in doing so in the review report.
4. BFIs increase fixed deposit interest rates to 11.03%, the highest it has ever been, from 10.03%.
On February 13th, 2022, BFIs increased their fixed deposit interest rates to 11.03% from 10.03%. The same month on the 17th, the mid-term review report of the monetary policy for FY 20787/79 was published. The review revised risk weights in different loans: personal overdraft Loans will have a risk weight of 150%, and real estate loans for land acquisition and development and lending against shares will have a risk weight of 150%.
5. Russia invades its neighbor Ukraine.
Russia invaded Ukraine before dawn with volleys of artillery and cruise missiles raining down on Ukrainian soil on February 24th, 2022.
6. Insurance companies to their raise paid-up capital.
This year on March 24th, the insurance board mandated Non-Life insurance companies to hike their paid-up capital to 2.5 billion rupees and Life insurance companies to 5 billion rupees.
7. The government bans the import of 10 different luxurious goods.
On April 27th, 2022, the government imposed a total ban on the imports of 10 luxurious goods until mid-July of the same year. Those goods included ci******es and tobacco-related products, diamonds, mobile phone sets, color TVs with screens bigger than 32 inches, automobiles (except ambulances and hearses, motorcycles above 250cc), toys of all kinds, alcoholic beverages, and playing cards.
8. 2079/80 fiscal budget announced.
On May 29th, the government announced the fiscal budget for FY 2079/80.
9. Foreign Exchange reserve falls 19.5%.
On June 11th, 2022, data published by the NRB showed that Nepal’s foreign reserves declined 19.5% (in dollar terms) in mid-June from mid-July of the previous year. The reserves are sufficient to cover imports of 7.5 months, down from 10.2 months last year.
10. SEBON abolishes the quota system in the share broker license.
On July 6th, 2022, the Securities Exchange Board of Nepal (SEBON) abolished the quota system in the share broker license. Three different licenses will be issued: general securities dealer; full operating securities broker service; and limited working securities broker service. Companies with a paid-up capital of more than 200 million rupees can now apply for a broker license. Companies whose paid-up capital is 600 million rupees can be share brokers, and those with 1.5 billion rupees can apply for a stock dealer license.
