News Digest: Economy & Development (November 4 – 10 2021)

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Money and Banking

Nepal Rastra Bank (NRB) on 09 November sold treasury bills worth Nrs. 6.10 billion (USD 51.588 million); with Nrs. 6 billion (USD 50.74 million) for a period of 182 days and Nrs. 100 million (USD 8.45 million) for a period of 91 days maturing on February 08 and May 10, 2022 respectively. The central bank issued the treasury bills to the highest bidder among the A, B and C class banks, other financial institutions, non-bank and financial institutions to raise short-term loans for the government.

Base rate of commercial banks across the nation have soared to 9.81 percent despite the central bank’s interventions and efforts to curb it. According to the newly released financial reports by commercial banks, banks had collectively increased the base rate during the mid-October period with Mega bank fixing it at the highest rate of 9.81 percent; making it exorbitant for borrowers to take credit. In contrast, the lowest base rate has been maintained by Standard Chartered Bank and Rastriya Banijya Bank at 5.18 percent and 5.41 percent, respectively.

According to the Department of Industry (DoI), over 1.3 million companies have renewed their registration, availing benefit of the concession provision as announced by Finance Minister Janardan Sharma through the Budget Replacement Bill 2021. Minister Sharma in his budget had announced to write off the remaining charges and fines provided companies submit their annual particulars until January 14, 2022. Subsequently, more than 150 applications are being filed on a daily basis for renewal. The applications have increasing by 30 percent till the mid-October period of the current fiscal as compared to the last fiscal.

Agriculture and Farming

According to the Agriculture Development Directorate (ADD) of Lumbini province, the province has become self-sufficient in food production. All 12 districts under the province have achieved self-sufficiency in staple food production. As per farmers, the province was able to achieve this due to the adoption of commercial farming, expansion in acreage, increased production of high-value goods, engagement of private sector and cooperatives and better support from three levels of governments. The province in total has produced 2.51 million tonnes of food for fiscal year (FY) 2021/22, resulting in a surplus of 445,000 tonnes.

The government has approved the work procedure submitted to it by the task force on providing monetary relief and support to paddy farmers who’s produce was damaged by the recent unusual rainfall and flooding.

Trade and Investment

Export earnings from listed or high value products increased by a meager 2 percent year-on-year during the first quarter of the current fiscal year (FY) 2021/22. According to the Trade and Export Promotion Centre (TEPC), shipments during the first three months of the fiscal – period between mid-July to mid-October – were worth Nrs. 10.30 billion (USD 8.71 million) as compared to Nrs. 10 billion (USD 8.45 million) in the same period last fiscal. Within the shipments, export of cardamom, tea and ginger has reduced whereas export of yarns, carpet, pashmina, medicinal herbs, textile, footwear and leather has increased.

Infrastructure

According to the Department of Electricity Development, 16 new solar projects with a total capacity of 93 megawatts have taken permission for construction this fiscal year. Similarly, 21 projects have acquired permission for survey.

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