Net Domestic Assets Rise Rs. 110 Billion Amid Growing Private Sector Credit

Nepal’s monetary system recorded an increase in Net Domestic Assets (NDA) by Rs. 110 billion in mid-August 2025, driven mainly by an expansion in private sector credit and deposits. According to Nepal Rastra Bank’s monetary survey, NDA rose to Rs. 4.99 trillion, reflecting modest domestic liquidity growth despite tighter monetary conditions.

Private sector credit was the key driver, expanding by Rs. 400.8 billion (+7.7% y-o-y). This indicates that businesses and households are continuing to borrow for investment and consumption, showing confidence in the domestic economy. Similarly, claims on other financial institutions rose by Rs. 17.1 billion (+6.2%), while claims on government enterprises contracted by Rs. 1.5 billion (−21.9%).

Interestingly, net claims on government fell by Rs. 65.1 billion (−6.6%), as higher government deposits offset borrowing needs. This suggests that the fiscal position has temporarily improved, reducing reliance on central bank financing. However, analysts caution that government deposits can fluctuate significantly depending on spending patterns.

The growth in NDA, coupled with strong remittance inflows, provides some relief to Nepal’s liquidity outlook. Still, concerns remain about whether credit expansion can translate into productive investments rather than fueling imports and consumption.