Nepal’s Recovery Needs Confidence, and Confidence Needs Action

Nepal’s economy is steady on paper, but momentum is still missing. Growth is slow, investment is weak and market sentiment feels stuck. Even with interest rates at historic lows, activity has not picked up. Confidence needs to return which requires quick action.

Foreign reserves and BOP are all time best and indicate stability. But numbers alone cannot lift an economy. Investors move when they see opportunity and the broader market responds when liquidity actually reaches the real economy.
Investors Must Earn Before They Reinvest.

Large investors have to start earning again before they can reinject capital. Despite a favourable interest rate environment, participation in the market is sluggish. The issue isn’t liquidity on paper but liquidity in motion. Banks need the space and clarity to expand credit so activity can revive. With the upcoming election, more liquidity will flow in the system before they start drowning us if we don’t act.

Allowing immediate liquidity to flow into the stock market would lift trading activity and rebuild confidence. Once investors start earning, reinvestment begins and the larger economy follows.

Regulators Must Move Together

SEBON’s IPO pipeline should be opened immediately but only after liquidity starts circulating and disseminating into the stock market. A dry market cannot absorb new issuances. If NRB unlocks liquidity into the market and SEBON times its approvals correctly, financial markets can regain depth and energy.

FATF: A Strategic Opportunity

With Dr. Biswo Nath Poudel at the helm, Nepal has a strong chance to push for an early exit. His diplomatic skill, political maturity and liberal economic outlook can help shape a credible reform path since he has luxury to lobby IMF and others for an early exit since we have put fires in Parliament House and Singha Durbar against corruption and bad governance. So, we have bold ticked the checklist here.

Dr. Poudel has stressed predictability, saying there will be “no surprises in the economy.” That message is encouraging but a hard shot must follow now. And the expectation now revolves around his directions to flow the liquidity into the stock market. Even ahead of the Monetary Policy/review, the country wants to hear clearly on liquidity because the time is ticking. Confidence and hopes when turn into misery can create panic.

Nepal doesn’t need dramatic shifts. It needs coordinated steps that restore confidence from Baluwatar to the markets.

A Final Word

Time is limited. Liquidity must move, investors must earn and belief must return to the system. With the Governor’s leadership and his diplomatic strengths while we enjoy this abundant resources, this moment can turn into momentum. Let the liquidity flow into the market first and open the IPOs prudently which will send a very positive signal to the investors.
Hopefully, Nepal’s recovery can finally begin to take shape.

अर्थ संसारमा प्रकाशित सामग्रीबारे कुनै गुनासो, सूचना तथा सुझाव भए हामीलाई [email protected] मा पठाउनु होला। *फेसबुक र ट्वीटरमार्फत पनि हामीसँग जोडिन सकिनेछ । हाम्रो *युटुब च्यानल पनि हेर्नु होला।