The average lending rate of Nepal’s commercial banks has declined to 7.12 percent, down from 8.69 percent a year ago, according to the Ministry of Finance. The weighted average deposit rate has also fallen to 3.56 percent. Despite lower interest rates, credit demand remains weak. During the first six months of the fiscal year (July 17, 2025 to January 14, 2026), deposits rose by Rs 417.48 billion to reach Rs 7.681 trillion, while private sector lending increased by only Rs 197.47 billion. To manage surplus liquidity, Nepal Rastra Bank has absorbed Rs 28.699 trillion from the market.
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