Nepal’s latest economic outlook: Why are people not taking loans?
Keeping the concern over the discouraged borrowings and defaults on loans, the base rate has also been lowered. In recent times, Nepal has witnessed enhancement in its external and monetary indicators, marking a significant turnaround in its economic landscape. A notable improvement is found in the current account and balance of payment, as the rising inflow of remittance paired with strengthened gross foreign reserves have resulted in a strong external sector of Nepal. As of mid-December 2023, the gross foreign exchange reserve was USD 13.3 billion, which was a 36.7 per cent increase from that of the same period in 2022. The balance of payment has also seen a surplus of 210.6 billion rupees along with the remittance being Rs 613.25 billion. The weighted averages of interest rates, encompassing the interbank rate, deposit rate and lending rate of commercial banks have all seen a decline; but the concerning thing is – people just are not taking out loans like they used to. Sluggi...