Top Economic news for this week- 1st Falgun to 7th Falgun

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Falgun 08, 2072- Last week's main events that provide insight into current Nepalese economic environment have been briefly presented below:

  • After braving a harsh winter in flimsy shelters, earthquake survivors in Gorkha district are bracing for the summer with spring arriving and thundershowers expected months before monsoon. As the reconstruction works have been delayed, people have started repairing their temporary huts constructed nine months ago for the rainy season.
  • Currently, companies, wishing to go public, are largely required to float their primary shares at face value of Rs.100. Existing law allows only the companies, which have registered net profit for three consecutive years, to issue shares at premium price. In this context, Securities Board of Nepal (Sebon) Chairman Rewat B. Karki stated that if companies are given an option to float their shares in a free price system, many companies will be encouraged to float their shares and list their securities in the secondary market for trading.
  • Mai Cascade Hydropower Project (7 MW) formally began power generation from Friday. The project uses water in tailrace of Mai Hydropower Project (22 MW) which was connected to national grid in October last year. The project is generating only around 2 MW at present as water level in Mai Khola River of Illam is very low.
  • People in various Hill districts in the far-western region are worried about possible food shortage this year due to prolonged drought. Crop production has dwindled in seven districts as they have not received rain since August, 2015. There is a high chance of food shortage in some of the hill districts in the Far West. Besides the weather factor, price hike in food products because of border blockade will also further the problem in the region. According to Dadeldhura Agriculture Development Office, paddy production has decreased by 26 percent in the district. Maize production has also gone down by 26 percent. Agriculture experts said winter crop production in Dadeldhura could decrease by 85 percent this year.
  • Lacking funds to begin reconstruction of its earthquake-damaged infrastructure, the Tribhuvan University on Saturday organized a donor conference to seek aid for rebuilding its offices and colleges as well as bettering the quality of education. Representatives from the embassies of India, the United States, Pakistan, China and Japan and representatives from the Asian Development Bank, World Bank and the United Nations Development Program participated in the conference though no fresh pledge was made.
  • Nepal Rastra Bank (NRB) has held up a dividend payment by Nabil Bank Ltd to its foreign promoter-shareholder. NRB has blocked the dividend payment worth half a billion rupees as the foreign promoter-shareholder did not offload its stake in the commercial bank as per the central bank's ruling.
  • The government plans to slash the time taken to complete an environmental impact assessment (EIA) by more than two-thirds in a bid to speed up approvals for major development projects. The Ministry of Science, Technology and Environment said that the regulation would be changed to shorten the EIA process for national pride projects and other schemes the government thinks need to be rushed.
  • Though fuel supply from India is improving, it has failed to end scarcity in the market as Nepal Oil Corporation (NOC) is not supplying sufficient fuel to pumps. Despite expressing commitment to resume regular supplies to pumps from Friday, NOC is supplying fuel to only few pumps.
  • Nepal started importing 80MW electricity from India from last Wednesday. Nepal Electricity Authority and India’s NTPC Vidyut Vyapar Nigam signed a temporary power supply agreement on Monday after settling price issues. As per the agreement, signed by NEA Managing Director Mukesh Kafle and NTPC General Manager AK Maggu, Nepal will for now buy electricity from India for the next four and a half months at Rs5.5 per unit (IRs 3.44 per unit).
  • Commercial banks have posted solid profit growth in the second quarter of the current fiscal year. Average net profit of 29 ‘A’ class banks jumped by 10.36 percent to Rs.14.7 billion in the first half of Fiscal Year 2015/16.  These banks had logged net profit of Rs.13.32 billion in the corresponding period of 2014/15.
  • Inspire Nepal 2016, Business Forum & Expo a platform for stakeholders and professionals of the private and public sectors to generate business, develop relationships, forge partnerships, gather knowledge and acquire expertise through creative interactions is being held in Kathmandu on March 10-12. The networking platform will bring together some 800 business and development professionals, 60 speakers, 150 exhibitors over an exhibition, 30 knowledge sessions and 10 networking events, according to the organizers. The expo is expected to attract international and national exhibitors from the private and public sector.
  • The country's foreign trade shrank by 29 per cent in the first six month of the current fiscal year 2015/016. The slump in the foreign trade volume is attributed to the decrease in import and export with India which constitutes two-third of country's foreign trade, according to the Trade and Export Promotion Centre. The export has decreased by 36.6 per cent whereas import by 36.2 per cent.
  • Although the government permitted a new transportation committee to operate three buses in Pokhara city, existing transportation entrepreneurs vandalized them on Tuesday. Following the incident, the police arrested Pokhara Bus Transportation Entrepreneurs' Committee Treasurer Pabitramani Adhikari and General Secretary Devi Prasad Kuikel on the charge of vandalism.
  • The flow of Chinese tourists, which had ebbed following the earthquake last year, hasn't seen a rebound even after the decision of the government to provide free visa to them.  The government started providing free visa to Chinese tourists since January.
  • The historic Dhararaha that was destroyed by the April 25 earthquake will be rebuilt from “citizens’ fund” to be established under the campaign “I will construct Dharahara”, the prime minister announced on Tuesday.
  • Electronic data collection of earthquake victims has halted in Baseri VDC of Dhading after fake earthquake victims began pressuring the suveyers to list them as ‘A’ grade victims. Surveyors said they had to stop their work after a group of people approached them showing ID cards of earthquake victims they had obtained dishonestly and demanded to be listed in the list of victims.
  • Paragliding Pre-World Cup is scheduled to be held in in Pokhara from February 27. The week-long competition aims at promoting tourism through entertaining and adventure sports.
  • Nepal and India are set to sign a new Memorandum of Understanding (MoU) for the construction of Postal Road in the Tarai during upcoming India visit of Prime Minister KP Sharma Oli. India had expressed a written commitment to build nearly 1,700km long road a decade ago. Although constructed works began in 2010 after the signing of a bilateral agreement in 2007, the project has failed to make progress due to negligence of the contractors.
  • The government of Japan has agreed to provide grant assistance of Rs3.5 billion (4 billion Japanese Yen) to government of Nepal for “The Project on Rehabilitation and Recovery from Nepal Earthquake”.
  • Electricity has started flowing into Nepal from India through the newly-completed Dhalkebar-Muzaffarpur transmission line. The 400 kV cross-border power line started operating from Wednesday, two days after the Nepal Electricity Authority (NEA) and India’s NTPC Vidyut Vyapar Nigam signed a temporary power supply agreement on Monday. The import of additional power started with electricity being charged for the first time on this high-capacity transmission line.
  • The meeting of the Council of Ministers on Thursday has endorsed the action plan on ending the energy crisis period within two years. The meeting held at the official residence of Prime Minister at Baluwatar has directed the Ministry of Energy to prepare concrete action plan for removing the general power shortage within a year and absolute power shortage within two years. 
  • The Nepali rupee plunged to an all-time low against the US dollar with Nepal Rastra Bank (NRB) fixing the exchange rate at Rs.109.93 for Thursday.
  • With the rupee weakening against the greenback over the last several months, the already steep rise in prices of imported goods caused by supply constraints due to the Indian embargo has been exacerbated. The local currency plunged below Rs.109 per US dollar on January 21 for the first time this year. Then it dropped to a record low of Rs.109.48 per US dollar on February 12 before eventually coming down to fresh low on Wednesday.
  • At least four memorandums of understanding (MoUs), including two on line of credit and reconstruction aid, are expected to be signed during Prime Minister KP Sharma Oli’s six-day visit to India beginning Friday. Officials privy to visit preparations said MoUs will be signed on India-announced $1 billion line of credit and another $1 billion assistance for Nepal’s reconstruction effort. These two MoUs will provide framework for utilising the Indian aid.
  • A day after Nepal Oil Corporation (NOC) reduced price of Aviation Turbine Fuel (ATF), domestic airlines have lowered airfare by as much as 18.31 percent. The new fare will come into effect from Thursday.
  • The government has declared a National Energy Crisis Reduction and Electricity Development Decade (2016-2026) with an aim to end the current power outage within three years and develop the hydropower sector. A meeting of the Council of Ministers on Thursday endorsed the work plan for the Decade prepared by the Ministry of Energy.
  • Acute power cuts are to be reduced to a negligible level by this time next year, according to a plan announced Thursday by the government. The plan titled 'The National Energy Crisis Reduction and Electricity Development Decade (2016-2026)' aims to end the energy crisis by importing a total of 580 MW. The country now imports about 235 MW and will add another 80 MW to this by Friday or Saturday, through partial operation of the Dhalkebar-Mujaffarpur Transmission Line.
  • Despite gloomy economic scenario in the first half of the current fiscal year, the government is hopeful of seeing economic activities rebound in the second half of 2015/16 when reconstruction activities is expected to kick off. Unveiling the mid-term review of the budget for Fiscal Year 2015/16, government has pledged to take necessary initiatives for achieving the revised economic growth of 2 percent. The government had set growth target of 6 percent in the budget for 2015/16. However, it had revised the target to 2 percent in the white paper issued in November last year.
  • Nepal Rastra Bank (NRB) has shelved a plan to set threshold for cash transaction. The central bank was preparing to fix the threshold of Rs.100,000 for cash transactions, restricting individuals and firms to make payments above Rs.100,000 in cash. However, the central bank has stepped back from its plan as a large section of Nepal still prefers cash over checks.
  • There seems to be no stopping to the Bull Run at the Nepal Stock Exchange (Nepse), as the benchmark index hit another fresh all-time high this week. The benchmark index has reached 1273.28 points – a fresh record.

"This summarized news has been written on the basis of news published on The Kathmandu Post and My Republica during the week"