Investors in Nepal’s stock market are facing heavy selling pressure after the central bank failed to implement an urgent measure suggested by the Capital Market Reform Taskforce. Interest payments due at the end of Ashwin have forced investors to sell shares, pushing the market down.
The taskforce, led by Rupesh KC and formed by the Finance Minister, had proposed that interest on share-backed loans due by the end of Ashwin 2082 be extended, with no penalties if paid within the extended period. While some recommendations, like removing the NPR 25 crore cap on share-backed loans and shortening the holding period from one year to six months, were implemented, the critical interest relief was not.
Investors even visited the Securities Board (SEBON) on Sunday after the market plunged, urging SEBON Chair Santosh Narayan Shrestha to delay the interest deadline. Many expressed frustration that the central bank had the power to implement this relief, but SEBON delayed action.
Investors pressured the wrong institution, not realizing that only a circular from the central bank could legally extend the payment period. Market participants say this confusion worsened the selling pressure.
Observers argue that such emergency relief should have been prioritized to stabilize the market. One veteran investor commented, “Why didn’t the central bank act on extending the interest deadline? This could have helped investors avoid forced selling, but delays worsened the situation.”
